A Debit Or A Credit Card? Which One Suits You Best?
Today most people use plastic cards to pay for any kind of purchase. Instead of cash money debit cards and credit cards are preferred. Many people consider them to be very alike, but in fact, there are many differences between these two kinds of plastic cards.
A debit card is a plastic card that is used instead of cash for a purchase. Debit cards are linked to your bank account and whenever you use the card, the corresponding sum of money is taken from your account. While making any purchase you enter your PIN code (personal identity number) into an electronic device. Sometimes your signature is also needed. Almost all banks provide debit cards today.
There are different types of debit cards. Each country has its own banking system and, consequently, its own types of debit cards. Debit cards can also be used to realize a purchase by telephone or over the Internet. Sometimes you can have a debit card without owing it physically. Some banks today set up a debit card for you to buy things only over the Internet.
Debit cards have a lot of advantages. If you use a debit card you do not have to pay interest charges. While you are traveling, it is very convenient to use debit cards, as they are more frequently accepted than checks. And you don’t have to take cash, a checkbook or traveler’s checks with you either. You needn’t show identification at stores. And last of all, it is easier to get a debit card than to get a credit card at most banks.
However, debit cards also have disadvantages. The first one is that you cannot buy anything your bank account does not cover. And you also have less protection if your card is stolen or lost.
Credit cards allow you to buy something and pay for it later. The card is again connected to your bank account, but not directly. It means that you can realize a purchase without having enough money in your bank account. You make monthly payments with funds from your bank account. Of course there is a fixed spending limit and you have to pay on time
Using credit cards can sometimes be risky. If you do not keep within the fixed limit you will be charged a fee. The charge may be as much as the APR (annual percentage rate). Most credit cards charge you annually for just having the card. But they are just as convenient as debit cards.
The choice is yours! Choose the best way for you to manage your expenses.
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