Debit or Credit

In these days when debt modification and relief actions are happening more often, it’s time to weigh your options concerning debit or credit cards.

Major purchases

Debit cards can successfully stop you from overdoing your retail therapy needs. However, the main limitation of debit cards is that if you are not satisfied or find a problem with your purchase, your debit card’s company will rarely intercede on your behalf, given that a debit card is essentially your cash in electronic form. Debit cards work best for small purchases, while credit cards are good for large ones.

“Travel expenses”

In the case of expenses such as car rentals, hotel room charges and filling up with gasoline, it’s always best to use credit cards, as debit cards have a holding system to prevent sellers from being shortchanged. This can lead to hundreds of dollars being frozen in your account. That can lead to overdrafts. It’s best to use your debit card as the final payment after all the expenses tally up.

Rewards

Debit cards are still falling short when it comes to rewards, compared to their credit-based brothers. However, do remember that part of the reward system is to encourage you to spend. If you think of it that way, it’s not so bad to have a less comprehensive rewards package.

Security

If you like the idea of packing a lot of “money” then credit cards are the way to go, given you may be liable for only about $50 if it gets stolen. Debit cards, on the other hand, can have you hanging out to dry, particularly if you’ve activated the overdraft options. But a debit card set up to your specifications is much more comfortable to use, as you know that you will never go over a certain limit (if you set it). Still, in both cases you should always check your monthly bills carefully.

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