Debit Card - Debit vs Credit - Is it Better to use a Debit Card?

"The Debit Card vs The Credit Card...What a country?!.. "

Debit card or credit card?

Using plastic to pay for expenses is common these days. We even have the choice of using debit cards vs credit cards. Americans spend more than a trillion dollars using their debit cards every year. When is debit the better choice over credit, and when is it better to charge?

Obviously, if you are experiencing debt troubles, or if you are carrying unpaid balances on your credit card month after month, the debit card is the better choice for you.

However, if you do not carry a balance on your credit card for more than three consecutive months, and you do not pay an annual fee on y0ur credit card, you will actually benefit from charging. There are four reasons why:

1. Delayed payment. Debit transactions are deducted immediately from your checking account. Credit transactions allow you to earn interest on your money until you pay the credit card bill.

2. Less danger of overdrafts. Debit card users pay more in overdraft charges than those who use credit cards. Consumers Union reports that those who use debit cards more than 20 times a year pay an average of $223 in annual overdraft charges. Those who use credit cards pay only $40 a year in overdraft charges on the average.

3. Purchase protection. Credit cards offer more protection if something goes wrong with your purchase.

4. Less liability. You have less liability if a credit card is lost or stolen. Not so with a debit card.

If you can pay off your charges each month, and your credit card does not load you with fees, you are better off using a credit card. But be careful. Unchecked credit spending can get you into financial trouble fast.
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