Why I Prefer Credit Card to the Debit Card?

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Which type of card should one choose while shopping? A credit card or a debit card? This is an oft-debated topic with no clear winner. The fact is both cards do fine as long you know the difference and you have an understanding when to use them. I personally prefer to pay via my credit card most of the time, unless of course the card is not acceptable for some reason. Not that my debit card is in the backburner, I do use it occasionally. Here are some key basics of each card and the reasons why I opt for the credit card.

Credit card

A credit card allows you use the issuer's money to pay for your purchases. In other words, when you make a purchase you have taken a loan from the issuer bank to pay back later. The billing period can be anywhere between 15 - 30 days. Once you make a purchase, the storekeeper asks you to sign a receipt.

Debit Card

When you swipe a debit card, you dig into your own bank account. The money is credited to the merchant instantaneously. In most cases, the ATM card you have doubles up as a debit card. Debit cards work well with most vendors but not all.

Where is the big difference?

Frankly, there is no big difference if you use both judiciously. However, the catch lies when your finances are low. If you do not have ready cash in your account, credit card comes to your rescue. However, remember to repay the entire amount, not just the specified minimum, within the stipulated period. If you choose to go long, the banks win. Creditors are loan sharks who want to rob you through a disproportionate interest rate route. Hence, credit card is a dangerous trap if you become too generous while spending. Read the fine print in the card's 'terms and conditions' and you will know why the issuer banks have not set a level playing field for you. After all, banks would like to shore up their bottom line by trapping defaulters. The non-payer eventually ends up repaying much more than what he or she has borrowed.

I listed some cons above. Yet why do I prefer a credit card? The answer is I succeed in playing a winning hand all the time.

I bag the benefits and trash the traps because,

• I pay before the specified time and avoid penalties
• I do not need a loan so I do not take one
• I benefit by the freebies credit cards throw frequently
• I purchase goods on sites like eBay where my debit card does not work. Debit cards are of no use with many online vendors who do not have the necessary interface into banking system to check availability of funds
• I benefit while travelling because, here again, by debit card does not work.

To me the credit card has an edge over debit card because it is versatile and I have made it work for me the way I want it to.

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Source by Arun Kaypee