Credit Card vs. Debit Card: Week 2 of 2

Many people want to gain better control of their finances by using a debit, but don’t want to have negative effects on their credit scores and finances by doing away with the credit card. Both have perks, which is why you should not do away with one or the other completely. Last week we discussed the importance of a credit card. This week we will be discussing the perks of a debit.

  • Living within your means. With a debit card you can only spend the money you have in your account.  Unless you have overdraft protection on your account, if the money is not in your account, you will get denied. You also don’t have to worry about paying interest!
  • Most people tend to spend less. Debit cards can make you feel more frugal, and most people try to spend less.
  • No late fees. Since you are only spending the money you have right now, there are no bills! And no late fees!

Having a debit card has many perks. But this does not mean to throw away the credit card. There are the right times for using both. For larger purchases you may need your credit card. Also, places like hotels may hold a certain amount of money as a deposit, in case something were to happen. You do not receive the money back until checkout, for example. If you were using a debit you would not be able to spend this money until it was credited back to your account.

As you can see from these past two weeks, there are times to use a credit card and times to use a debit. You must know when the best times to use each are! Having a credit card is important for building credit. Just don’t abuse the credit card! And as always, be frugal with your purchases whether using a debit or a credit.

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13 Comments Add yours

  1. Sean says:

    I agree with this post that there is a certain time to use both credit and debit cards. I feel like a person should use a credit card for larger purchases so you can save up to pay it off at a later date. I personally use my debit card more often because it is easier for me to control myself from spending too much money because I know how much is in my account.

  2. Sean says:

    I agree with this post that there are certain times to use a credit card or a debit card. Using a credit card to purchase larger items makes more sense because you can save up and pay off the expenses at a later date. Personally I use my debit card more frequently because I can control my spending because I know how much is in my account.

  3. Josh says:

    While I see both sides of this debate, I prefer debit cards over credit cards. Debit cards are very useful for keeping a budget, unlike credit cards. Not to say credit cards don’t have their uses, because they are very important in building credit. I suggest that you get several credit cards, and use only one. You can lock the others away in a safe if you like, just make sure you don’t use them. This is a very effective way of building credit that I learned from my high school civics teacher. You also pointed out several other advantages of the debit card, such as no fees. This is why I find the debit card more college-friendly. The last thing students need soon as they leave the house is a credit card.

  4. relating says:

    I think this blog portrays a good balance between debit card and credit card usage. This is the approach that I try to take when balancing between frugal debit card usage, and credit boosting credit cards. It is good to see an article that addresses a topic that has an “extremist viewpoint” tendency.

  5. Quintin says:

    Presonally I am more careful with my credit cards. When I use my debt card I tend to spend more because I know I have money in my account. With my credit card I know I have to pay the money back so I am more carefully of my spending. I do agree you should choose the write time for credit or debit.

  6. Brandon says:

    I agree that both Debit and Credit Cards are important depending on the situation, however I do not agree that Debit Cards encourage people to be more frugal with their money. From my own experience and talking with my friends I have noticed that having a Debit Card actually makes people spend more money because they don’t see it as cash money leaving their accounts. I have found that the only thing that truly makes me spend less money is when I am spending actual cash money.

  7. Ashlee B says:

    It is a very true statement that both credit and debit cards are necessary to life. For anyone who believes getting rid of both is the right answer, is not looking out for their own well-being under certain circumstances. Besides the other pros that come along with these cards, they’re great for your financial safety. If you are walking around carrying only cash and that gets stolen, it’s gone. For a stolen, debit or credit card, you can call the bank cancel your card and any charges made once stolen, will be investigated and rightfully returned. As far as why the cards are equally important, I agree completely with the article. They each have their perks. There is a feeling of comfort when using a debit card because you are actually spending and using your money that you have now. However, with a credit card, you are borrowing money you must pay back later. Some instances require that though, so it would make sense to have that as well. Management is really the way to go with it comes to finances. As long as you live within your means, have a budget, and spend wisely you can use both cards properly and be debt free!

  8. Gloria says:

    This article gives good information about the use of debit cards. I agree with this article and how it says you need both credit cards and debit cards for different circumstances!I believe debit cards are better for everyday spending because you are using your cash in the bank. This lets you better keep track of your money. Credit cards are still good to have for other reasons. For one, emergencies! If something comes up and you need to pay a large sum of money, you should use your credit card in this case. Also use credit cards for large purchases.
    Everyone should have both credit and debit cards, you just need to find the balance between them.

  9. Dwayne Dailey says:

    As with anything in life, a responsible middle ground is the best solution. Having a credit card is necessary for large purchases as well as emergencies. Also, debit cards have the added benefit of living within your means. Having the two will benefit any personally responsible spender. Some other benefits can include APY for having the card, ease of use, and security. While there are benefits, sometimes ignorance is not bliss and using a card without knowing the terms can harm you. Having said this I still believe that the potential benefits outweigh the potential pitfalls.

  10. Laura says:

    I absolutely agree with this post. It is true, that if you can manage your money properly, it will benefit you to have both a debit account and a credit card. I have been in the exact situation before where I used my debit card at a hotel, and they froze my funds until I checked out. Luckily, I had enough cash on me to get me through the trip, but had I not, I would have been in trouble.

  11. Fang Lin says:

    Credit cards does help built credit where debit cards help people spend less but I think when it comes to saving, cash is actually the best way to control the usage of money. I suggest try to eliminate the use of credit cards only on large purchases and eliminate the use of debit cards on places that only accept check or debit cards. Having certain amount of cash on your wallet would frequently remind you how much you have spent where you don’t have to keep a record on the amount you spent whenever you swipe a card.

  12. Dwane Hughes says:

    I agree with this articleWith a debit card the money is being taken directly out of your account, more consumers tend to charge to their credit card rather than your debit because they know its not their money and they dont have to pay it immediately and can defer the payment to a later date.

  13. Matt says:

    As I learn more about money management in my college class, I agree with your assessment of the behavior of consumers using debit cards compared to those using credit cards. Since the debit purchase is deducted directly from a checking account balance, consumers must be sure that they have funds available to make the purchase. Therefore, they tend to be more careful with the purchases they make using this form of legal tender. To many people, using a credit card is like buying goods and services with someone else’s money. Since it doesn’t affect THEIR bottom line immediately like a debit purchase, it’s easier to spend more freely. It’s probably easier to accumulate large amounts of debt without even realizing that you have done so. With a debit card, if the funds are unavailable, the transaction cannot be completed. That’s the end of the story with a debit card: if you can’t pay for it, you can’t have it. However, credit cards allow consumers to “buy now, pay later,” a strategy that ultimately hurts consumers more than it helps them.

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