Credit card and Debit card are two essential things in our daily life. Both cards help us in different ways. Credit cards are useful for people who able to settle down the appropriate money monthly and manage the card properly. Debit cards are good for people who able to manage their life with the budget. If we compare these two cards, I recommend you to get the debit card because credit card put you in trouble in some way and debit card not do so. Would you like to know the advantages and disadvantages of credit cards and debit cards? Here is the article for you. I’m going to point out what are the advantages and disadvantages of having credit cards and debit cards.
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Advantages and Disadvantages of Credit Cards
Really needful in the Emergency situation – Credit card always the best solution for your emergency situations. Let’s say, suddenly you admitted in a hospital and you have to pay a big amount in order to start treatments. But you don’t have enough money in your wallet or debit card. Such these situations credit cards will help you much. Whenever you worry about the shortage of money, a credit card is the best solution on that occasion.
Purchase protection – You can get more protection if you pay with the credit card than a debit card, cash or cheque. For example, let’s say you buy a laptop for $1000 bucks. Sometimes the one you ordered is not delivered or there was a fault in a delivered laptop or some other major issues. In these situations, first, you can contact with customer care where you buy that laptop. If they not helpful, straightaway you can talk with your credit card company and claim back your money.
Transfer credits – This is a good advantage for all people, especially for small business people. Because small business people put all money into their business and end of the day they struggle to pay for the credit card. In these situations, if you get a new credit card, that will help you in a different way. If your new credit card offers one-year transfer free facility then you can transfer all that card money to your old credit card and pay little by little to the new credit card every month.
Interest-free period – Most of the credit cards give you an interest-free facility. It may differ in duration like some merchants provide 6 months interest-free or some provide 1 year or even some other merchants provide 2 years interest-free. This is one of the great things for credit card holders. You don’t need to worry too much during the interest-free period as you don’t need to pay any extra money to credit card.
Convenient to use in a wide range – You can use your credit cards anywhere and everywhere. So you don’t need to think about cash or checkbook as long as the credit card in your wallet. So simply you can save your time and trouble.
Build your credit line – Maintaining a good credit score is always essential not only for applying for credit cards but also for applying for loans, some jobs and for buying things on a contract basis. A Credit card is the best thing which helps you to increase your credit score as long as you pay your bills and make an appropriate payment to the credit card in each month.
Lots of benefits – Credit card offers you lots of benefits such as discounts at particular stores or companies, give some airline travel discounts, special insurances like travel insurance and lot more facilities you can get from your credit cards.
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Blowing your budget – The biggest disadvantage is, the credit card suppliers encourage you to spend money. When some people get a credit card, they think like got a jackpot. They never think about the future. So they spent from their credit card without any limitation. Some credit card suppliers give 1-year interest-free facility, so spending does not affect much in the beginning but definitely, your future will be in big trouble.
High-interest rate – Credit card companies charge a high amount of interest on each balance that you don’t pay off at the end of each month. This is how credit card companies earning money at the same time this is how most of the people around the world get into debt.
Chances to diminish your credit score – a Credit card is a good way to increase your credit score as long as you pay their monthly outstanding. If you do not pay the appropriate amount monthly then there are more chances to affect your credit score. So be aware and keep your credit score in a good position.
You feel like work for the credit card – Spending money is much more easy, meanwhile earning money is much harder. Credit cards won’t affect you at the beginning stage. but day after day the credit card monthly settle down amount is going higher and higher unless you managed properly. It makes you feel like you work for credit card settlement. Because every month you have to pay some appropriate amount to the credit card from your salary.
Do account regularly – You have to do account very often. If you don’t track your purchases, it can be difficult to know how much you spend in a month until you received your statement.
Face more charges – If you fail to manage your credit card properly then you have to face more charges. credit card companies will charge you when to fail to make the minimum payment by the due date or exceed your credit limit or have a direct debit or cheque returned unpaid.
Advantages and Disadvantages of Debit cards
No headache since the money is yours – One of the biggest advantages of having a debit card is you don’t need to push yourself under pressure since the money is yours. Credit cards encourage you to spend money, but debit cards encourage you to earn money.
Comfortable in Wallet – Always cards are much more comfortable than cash. Literally, a thin card is better than 20 or 30 notes in your wallet. It makes very fewer chances of lose your money to thieves. Here is one of the best wallet I found for especially credit cards.
Easy to get – Unlike credit cards, debit cards are easy to get from the bank. Just do some paper works and you will get your debit card in 1 or 2 weeks once you are eligible to use.
Spent within your budget – After all, we all are human beings. If we have more money, we spent more. This is the chance for credit card suppliers, they provide more money and encourage us to spend more. But as long as you only have debit cards, you never exceed the budget limits. If you earn more, then you can spend more. If you earn less then you have to spend less. This is really good for your life in terms of spending habits and encourages you to go to work.
Protection – having a debit card is protect you in some way. There is some everyday ATM withdrawn limit which is good for you. if someone steals your card, they won’t withdraw all amount from your card in a day. Next day bank will deactivate your card as soon as you inform them. Also, most of the countries not allow you to use your debit card abroad unless you inform them before flying to abroad.
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Not help in an emergency situation – As I mentioned earlier, in emergency situations credit card give you a hand while debit card does not do so unless you maintain a good balance on your debit card. If you don’t have money in emergency situations it will push you to distress.
No benefits like a credit card – Debit card means whatever you earn can spendable and no more. You won’t get any benefits from your debit cards. But some banks like Natwest bank in the UK provides debit cards, named Platinum or Silver or Gold. If you get one of these cards, you will get some benefits but you need to pay some extra money monthly to the bank.
Fees applied in different ATMs – There are some charges applied when you withdraw money from different bank ATMs.
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These are main advantages and disadvantages of credit cards and debit cards. Hopefully, this article may help you in some way. My final word is, have a credit card but don’t spend money on it unless you need money very urgent. For daily life use your debit card and make your life happy. Don’t put yourself in big trouble by using credit cards in your daily life. Any questions or suggestions feel free to throw it in the comment box below. I always welcome your comment and suggestions.