|
VMPL
New Delhi [India], February 11: Financial management, spending, payments, and security are all affected by the decision of whether one opts for a credit card or a debit card. While most people use both, each card optimally serves a different function. Debit cards are linked to your checking account, while credit cards let you make purchases and then pay the balance later. Knowing and understanding the key differences between both types of cards will assist you in deciding when one is a better choice than the other. In this article, we will address the advantages of credit cards and talk about the added flexibility that credit cards provide as compared to debit cards. How Credit Cards Work Differently from Debit Cards When users make a purchase with a debit card, the money is withdrawn from the bank account to which the card is linked. With every transaction, the account balance is reduced and the money is taken out immediately. With a credit card, on the other hand, users are given the privilege to spend money within a certain limit, and pay for it later. This aspect of credit cards offers their users several advantages. When it comes to comparing credit cards vs. debit cards, it is not a question of which one is better, but instead of using the correct card in the right situation. Advantages of Using Credit Cards Over Debit Cards Stick to your cash flow plan A credit card gives you the freedom to control your spending without affecting your cash balance. This is useful when you have an inconsistent flow of income or higher expenses. Short Term Pay In Full Billing Cycles Many credit card companies offer a bill cycle that allows you to not incur interest on your balance if you pay in full. Debit cards do not offer this option. Helps Establish Credit History Using credit cards consistently and paying on time is a positive way to create a credit history. Using a debit card does nothing to build your credit. Increased Fraud Protection Credit cards provide you with better fraud protection. Since the transaction is not deducted from your bank account, you have time to take control of the dispute. Protection While Shopping Online It is safer to shop online with a credit card. There is no risk of losing any money currently in the account since it is a credit transaction. Support for Financial Emergencies Credit cards provide a cash option when you do not have available savings. Debit cards give you nothing more than the cash balance you already have. Transaction Disputes Are Better Credit cards allow for disputes on any pending transactions. Debit card transactions do not allow for disputes since the money is already deducted from the bank account. Benefits and Rewards You get reward and cash back programs with credit cards, which debit cards generally do not offer. Credit cards offer more flexibility with added perks than debit cards. Easier Budgeting Each spend on a credit card is categorized into segments that make up a budget, creating a slice of that budget and show a visual of that section of the budget that is filled. This is easier and more organized than a debit card that doesn't show a breakdown of spending. Travel Perks Credit cards make traveling easier as they are accepted just about anywhere, and can make international transactions. Planning is key with credit card use. Having a spend plan keeps debt and overspending under control, and allows the card to be used as more of a flexible tool rather than a burden. Credit cards then become a good option to have on hand, especially for intended purchases and online payments. Keeping debit cards Debit cards are easier to use for daily purchases. They're ideal for people that want to spend only money that they have and avoid credit card spending. Conclusion With credit cards you gain flexibility and control over managing your finances, as well as added layers of security. While debit cards provide direct access to your bank account, credit cards offer better fraudulent charge protection, help in creating a credit score, and assist in bridging cash flow gaps. Knowing how to navigate both credit and debit cards will help you gain credit card access to a comprehensive money management tool, instead of simply a method of payment. (ADVERTORIAL DISCLAIMER: The above press release has been provided by VMPL. ANI will not be responsible in any way for the content of the same.)
|
