Trying to Decide between Credit Card and Debit Card Applications

Most cards look the same regardless if they are debit or credit. They can be VISA, MasterCard, Discover or American Express and they can come from nearly any bank in the country from Chase and Citibank to HSBC and Orchard Bank. The problem though isn't about how they look- it is about how they operate. It is a simple fact- credit cards operate in different ways then debit cards. It is the subtle differences that card holders should be aware of in deciding which to choose.

First, let's look at what each card represents. Debit cards represent the money that you currently own. When you use your debit card you are using the money that already exists in your checking account. There is no chance of going into debt because you cannot spend what you don't have. Credit cards on the other hand represent the credit that you have. It works more like a loan because you are being loaned a particular amount of money each month and it needs to be paid back. It is very possible to get stuck in a high debt situation using one or more credit cards.

Credit cards require a much higher degree of discipline then debit cards do. It is a lot easier to spend money that you don't have! Here are a few of the things you should look for between debit and credit cards:

• Liability is a huge deal when it comes to credit cards and debit cards because the top credit card offers will allow you a great safety net then debit cards will. It is a lot easier to get your entire savings wiped out with a debit card then it is with a credit card. Credit card companies secure your account up to $50 so that is the maximum that you will have to pay if your card ends up getting stolen and misused. Even if you report a stolen card immediately you will be expected to cover any debit card purchases.
• The nature of credit cards is different then debit cards because of the pay periods. Debit cards mean you pay now while credit cards let you pay later. The best unsecured credit cards come with low rates and sometime fee free as far as annual fees and such. If you compare credit card offers you can often come out with an exceptionally great card that will fit all of your needs. Also, while many credit cards come with great rewards programs very few debit cards do. These rewards programs can include anything from cash back rewards to airline miles. If you are a frequent flier then a miles card can benefit you greatly. The key thing to keep in mind when it comes to credit card offers is that you need to pay your balance off each month. If you really want to capitalize on all of the benefits that credit cards have then you can't be carrying a balance each month that will have you paying out more in interest then you will be reaping in rewards.
• Protection on credit cards is also much better then that on debit cards. If you purchase an item online and it comes to you damaged then you, as the consumer, can file a report of it and never have to pay the amount. This type of protection is not available on debit cards and it is something that can help you avoid getting ripped off on internet purchases. Even if you only have a credit card for online purchases it is still a good idea to have one.

While you will get the best credit card offers if you have excellent credit or good credit you can still get credit card offers for bad credit. While they will be bad credit card offers you can still obtain a card which will give you many of the same features. Often though, you will need at least fair credit to get a card with a rewards program.

A credit card is a big responsibility and you can use it to your advantage when it comes to spending if you do it in a wise way. Credit or debit- the choice is yours!

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