Which card is best for you? Credit or debit card

With the alarmingly increasing rate of identity theft cases, card users are always wondering which card would be better to use: credit card or debit card. With the battle of credit card vs debit card, the arguments are endless. People often times think that using a debit card is much more convenient because you are using your own money thus, not creating debt. On the other hand, some people prefer using their credit cards because they help in building a good credit score.

Most people carry cards these days because of the ease and convenience they bring to people. They do not have the hassle of using checks and they are much safer to lug around than cash. When you use your debit card to make a purchase, the respective bank takes the money from your account and deposits the money into the account of the establishment where the purchase was made from. Debit card statements usually update faster than credit card statements because no approval is required, therefore no processing time is needed.

When you are at the checkout counter, stores normally ask whether you are going to use debit or credit. Although the outcome seems the same, the process between debit and credit are totally different and go through different processes. If you use a credit card, you will always be asked to sign for your purchase. All transactions that require a signature especially credit card transactions go through a network and should pass additional security procedures that are conducted by the credit card companies. It is necessary for card transactions to go through them to ensure that they aren’t fraudulent.

However, in truth, establishments, even though they give you the option to use debit or credit, do not actually like it when you decide to use credit.

If you are wondering why, the reason is this, when you use credit, banks earn your purchase and receive a larger percentage free from the merchant or establishment where you made the purchase from. This is the reason why banks are generous in offering reward points and incentives to credit card holders who frequently make use of their credit card.

For a more comprehensive understanding of debit cards, when you use them, you will always be asked for your PIN number. Once the device accepts your PIN number, the purchase will be processed through an Electronic Funds Transfer or EFT system such as STAR or NYCE. You have to keep in mind though that these networks do not provide the same security procedures as that of other major credit card companies. Establishments like this option are better because they are avoided of having to give the bank their hefty percentage fees. Moreover, some shoppers like using their debit more because they are entitled to make use of the cash back service. Cash back services are only made possible through debit cards which are a good way to avoid spending on ATM fees.

Regardless of whether you choose debit or credit card to purchase an item, they would always be safer than using cash or issuing checks. If you happen to lose your cards, you can simply call your banks, ask them to cancel your accounts and request for new ones. However, when it comes to fraud, more people say that using credit is much safer. When you lose your credit card and somebody takes advantage of it, you can immediately call your banks and have the fraudulent purchases cancelled which enables you to clear the illegal charges made under your name. On the other hand, if you lose your debit card and it falls into the wrong hands, even if you manage to call your bank immediately, they may cancel the purchase but they may never get your money back.

Regardless of which card you use, make sure that you monitor your credit scores regularly. This is a good way to keep track of your finances and to make sure that there is no suspicious activity going on. Therefore, in general, it is better and safer to use either your debit or credit card instead of cash. However, it would be best to use your credit card unless there is a need for you to make use of the cash back service. At least, with credit cards, you will not only enjoy the benefits and the rewards program but you will also be assured of your security because of their added security programs.

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