Do you often get confused as whether to use a credit card or a debit card for making a purchase? It is quite difficult to reply it by a ‘yes’ or ‘no’ as it often depends upon the type of transaction that you’re making with a card. If you use a debit card, the amount gets directly debited from your back account whereas, you need to pay the bill later when you swipe your credit card for a financial transaction.
Credit or debit card – Which one to use
Read on to know when to use a credit card and when it is better to swipe a debit card for a financial transaction.
While purchasing big items – It is better to use a credit card for buying big-ticket items, such as, a television, a laptop, etc. This will help you to dispute the charge if there’s any problem with the product you’ve purchased. If you purchase with a credit card, then you can withhold payment if there’s any problem with the purchase; usually, the credit card issuer also investigates the problem for you. You cannot withhold payment when you use a debit card as the amount gets deducted from your back account as soon as you swipe the card.
You want to control your overspending habit – If you’ve tendency to overspend and want to control it, then using a debit card is a better option over credit cards. Every time you swipe your debit card, your bank balance gets reduced. So, you are less likely to overspend as you know how much money you have in your bank account. Therefore, it can be said that using debit cards may help you to avoid falling into credit card debt.
Paying at hotels/gas stations by plastic money – Often, hotels, restaurants, car rental companies, gas stations and retailers put a hold on your credit/debit card until transaction is processed. So, it is better to use a credit card in these types of financial transactions. This is because the hold on your account can prevent you from accessing it. So, it may result into bounced checks and your other transactions may also get declined for the time being.
When safety is your primary concern – You should always use a credit card when safety is your primary concern while making a financial transaction by using plastic money. As per federal law, you’re much more liable for a fraudulent charge on a debit card as compared to a credit card. You may have to pay much more if you fail to report the theft or loss of your debit card/PIN within 2 business days from when you’ve discovered the problem. Moreover, a fraudster stealing your PIN may withdraw amount from your bank account.
If you often forget the due dates of your credit card bill payments, then it is better to swipe debit cards for making everyday purchases. However, as already mentioned, it is advisable to make big purchases by using credit cards only.