Should You Spend On Your Credit Card Or Debit Card ?

Credit cards offer you fast access to cash that is not yours and this is similar to borrowing money. Only that you don’t have to go through the personal loan application process used when taking out a personal loan from moneylenders. Also, debit cards only help you avoid the long queues at the ATM.

Actually, you are using your cash, with some occasional perks. With this in mind, which of the 2 would you rather use for your spending?

Let’s take a look at the two cards and what each has to offer you.

Eligibility Criteria

You will require to meet specific criteria when getting credit cards. In Singapore, an applicant is required to have a monthly salary of about $2,000 to get a credit card. Even then, past conditions, like bankruptcy, can disqualify you from getting a card. But talk to your moneylender to confirm that you meet the requirements.

What about when getting a debit card?

For you to qualify for a debit card, you only need to have a bank account. Actually, most banks provide ATM cards which act like debit cards, hence one is given automatically. This is simple since you only go to the tellers and request for one; it’s possible to have one on the spot.

Purchasing Power

Credit cards allow you to make purchases until when you reach the credit limit. This limit differs depending on your salary, credit history, and even promotional gimmickry. Given that your credit standing is good, your limit will be at least double your salary. Many credit cards offer higher than this. You can also write your moneylender asking for a higher limit, which they might authorize.

Debit cards, shift between preventing your purchase power, or not have an effect. There is a daily limit for the transactions allowable using the card, usually between $2000 to $5000. When you hold more in your bank account, you may not use it. When your balance is less than this, a debit card will not impact your buying power.

Protection

Debit card immediately approves transactions, while a credit card offers you the chance to block payment. Meaning that credit cards are ideal if you got scammed, or bought products that are defective.

What can you do in such a situation? You only need to call your moneylender to block that payment. But with debit cards, you will have directly put the funds in the seller’s pocket. You might need a police report to get it back.

Credit cards have liability limits which mean when someone makes a purchase using your lost Visa, you will not pay the entire amount. You will only pay for the liability. Debit cards will offer protection through their set daily limits. With this in mind which card will work best for you?

Discounts and Rewards

Debit and credit cards both offer discounts and rewards. But for the bigger part, the debit card will not afford you more freebies and discounts than what credit cards can. The rewards offered on debit cards are mostly in the form of small payment rebates (frequently under 1%). You might also get fidgety small bonuses, for instance, VIP parking slot at specified malls, or get a dollar discount on your next burger.

On the flip side, Credit cards will get you some rewards points (this can be redeemed for a wide range of things), cash back, frequent flyer miles, dining privileges, entertainment, among others. Keeping this in mind, make sure that your way the positives and negatives that each card will afford you. Consider getting a card that helps you save.

Convenience

Managing without using a credit or debit card compares to cycling to work: outwardly you can boast of how healthy this keeps you, while inwardly you are cursing for the inconvenience.

What can you do when you are considering whether to get a debit or credit card? So what if you are fed up of being unable to make purchases online. Or when you have to borrow from someone a card for downloading some apps, even for the free ones.

What if you are done making frequent trips to an ATM. Even in such a circumstance, of the two( credit and debit cards), which plastic money should you consider? Be sure to find out more about the two cards forms to help you make informed decisions.

Interest Rates and Fees

Most debit cards do not have any fees. So, does that mean that you will not incur any charges and interests on your debit card? There are a few debit cards that will charge you transaction fees, particularly when you use them while in a foreign country. During the application process for your card, you may set up an overdraft option. This means that it starts drawing funds from another account at after your current gets empty.

Of course, this will come with a specific fee accompanying such transactions, this is based on your bank. What about credit cards, what charges and interests do they attract? These have more charges in fees, starting with annual fees to late payment costs. This cards will charge interest.

Self-Restraint

It just happens that some people cannot be trusted in their use of credit cards. For instance, when you are a parent, giving your teen a credit card can be a more dangerous move.

How can you teach your child how to spend wisely? Is a debit card good for them? How can you ensure that you offer them an allowance and avoid them bankrupting you?

Getting your teen a debit card might be the way to go. And you will not have to worry about them overspending. Provided you have some measure put in place like a limit of the amount they can borrow. Of course, once the amount in the account is exhausted their purchasing power is taken away. Use a debit card when you cannot check your spending.

The Bottom Line

Those people who are able to check their spending will make the most of the deals offered on credit cards for most of their purchases. To ensure the less disciplined spenders are within their means, a debit card will do the trick. It will also protect the economical ones from fees too.

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