Learn about the differences between debit cards and credit cards. Discover the benefits of debit cards and credit cards but also the cons of both. Compare credit cards with debit cards.
With the flush of credit these past years, it is no wonder that they have risen so dramatically in popularity. Credit cards are incredibly convenient, offer many benefits and rewards and do not require that you carry a wad of cash around in your wallet. Many credit card companies also break down your purchases in your monthly statements so you know exactly where you spent your money and what. It is even divided into neat, little categories. This makes it very easy to manage where your spending is going.
Debit Cards Versus Credit Cards
However, there is another type of card that is similar to a credit card but functions a bit differently. Debit cards are very similar to credit cards in that you can use them almost at any place that you can use a credit card. Debit cards have also risen sharply in popularity. Studies have shown that recently 56% of Visa card sales were made with debit cards as opposed to 44% with a credit card.
The sudden popularity may be attributed to a couple of factors. Customers are noticing that restrictions on ATMs/Eftpos cards have become a hassle and more and more debit cards are being advertised therefore making it a more visible to potential consumers.
And, for those customers that like to shop on the Internet, they will be pleasantly surprised to discover that more and more debit cards are becoming accepted for use over the Internet and on the telephone. This increases the debit cards functionality.
How do Credit Cards Fare Against Debit Cards
When you “compare credit cards” against debit cards you will see that there are stark differences. One of the major differences is that debit cards do not use credit. The money that is used on your debit card comes directly from your banking account. Because of this fact, there is no interest to pay because you are not borrowing any money. There is also no annual fee. One of the drawbacks is that you do not receive perks or rewards that accompany credit cards.
However, if you use your credit card wisely, you can reap all of the benefits and rewards without being stuck with the interest. Many credit card companies offer interest free days that allow you to pay off your balance without being charged any interest. It is also very convenient if you are low on cash flow and need to use your card in an emergency. Like any convenience, though, it can be abused and debts can mount quickly without the ability or means to pay it off.
When you compare credit cards with debit cards you see that there are advantages and disadvantages to both. One place that you can shop around for debit cards is RateCity. RateCity uses expert comparative data from CANSTAR CANNEX so you can be certain that you are receiving the latest and most up-to-date information.
