What to Choose - Debit or Credit Card?

Nowadays debit and credit cards have much in common: they have the same logos - for example, VISA or MasterCard and they both can be used for making purchases or cash advances. So, what card to choose - debit or credit?

On the one hand, debit cards are ideal for those who want to control their finances and stick to budget. You just won't be able to spend more than you have on your account. Applying for a credit card means that you are taking a loan, which has to be paid back. So, there is a possibility to accumulate a credit card debt.

On the other hand, a credit card gives you an opportunity to pay for purchases later. It is really useful when you urgently need money, for example in emergency cases, but you don't have it on your account.

Let's see what financial experts say on the topic. They recommend using debit card for the purchases when you would normally pay with cash. And you should better buy expensive goods or make online payments on credit cards. The reason for this is that paying with a debit card is more risky than paying with a credit one. Under federal laws, if your credit card is stolen you have to pay only $50 of unauthorized charges. The rules are similar for debit cards, but there are several limitations. For example, the laws work only if you inform the debit card issuer within 2 business days of discovering the card's loss or theft. Otherwise, your liability may go up to $500.

Then, many credit card issuers enable you not to pay for goods or services you bought on your plastic if you dislike their quality and you have tried to settle the problem with the merchant. A debit card would not offer you any card protection in this case.

The other protective measures offered by credit card issuers include various insurances, such as a car rental insurance or a travel accident insurance. Whether you travel for business or pleasure, many things could happen to affect your trip. With a credit card in your pocket you needn't worry if your rented car is broken or flights are delayed for a long time.

Then, credit card issuers offer extended warranties for goods that you bought on your plastic - your purchases will be protected from damage or theft for up to 90 days from the purchase date.

Debit cards offer you to benefit from accumulating interest on your account. However, you can take advantage of credit cards too. If you control your spending and make payments on time, you will get access to great reward programs. You will earn points for every dollar you spend and redeem them for free hotel stays, airline tickets, entertainment or gift cards. The key to benefit most and avoid paying interest is to pay your balance in full every month.

Credit cards require a much higher degree of discipline than debit cards do. But they offer you benefits that debit card do not have. Credit or debit card - it's up to you to decide!

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