Debit Or Credit Cards? Choose According To Your Personality

These days, credit cards are getting criticized to the ground. With credit card companies quickly cutting down available credit and upping interest rates and fees, you can understand why. As credit cards lose more and more popularity among American consumers, debit cards are slowly taking its place in the “pay-with-plastic” department. Credit cards and debit cards have their strengths and weaknesses and choosing between them is not easy. The best way to choose between the two is to base your choice on your personality.

Debit cards function much like credit cards. You get a convenient payment option where, instead of carrying several paper bills and coins, you just use a plastic card that the merchant will swipe to have your purchase paid for. The major difference between a debit and a credit card is that, with a debit card, you have to secure your card with an advance deposit to your account. Any purchase that you make with your debit card is paid for directly from that deposit. This means that your payments are not loans and will not earn interests.

The downside is that, with a debit card, you are pretty much limited to how much you deposited in your debit account. Some credit companies do offer overcharging protection but that runs counter to your purposes really. An overcharge service may save you from embarrassment when you get to the counter and you’ve brought one too many items to fit your debit limit but it will also cost you dearly in terms of fees. Better to opt out of it at the very beginning instead. Like credit cards, debit cards can also earn you reward points. However, the amount of rewards you earn will be much lower than what you’d earn if you use credit cards.

You probably know very well what a credit card is by now so it won’t be necessary to go into too much detail here. Credit cards have several advantages over debit cards. For instance, credit cards can give you a few weeks leeway before you need to pay your purchases, a very important option if you are having some flow problems. Credit cards also earn points and rewards much faster than debit cards do.

On the downside, because paying with a credit card is essentially taking out a loan, you will be facing interests and fees which can make your expenses balloon especially if you miss out on the payments.

In general, if you are someone who easily gets tempted to spend because of the convenience of paying with plastic, you probably should go for debit cards. On the other hand, if you are conscientious with your plastic purchases, you could really get a lot of benefits by going with credit cards.