If you had the choice of a debit card or a credit card, which one would you choose? I will give a perspective on both of them.

Debit Card

Basically how a debit card works is that it is connected to your bank. Every time you use a debit card, it takes money out of your bank account.

Advantages

You are fully aware how much money you have left over after you have used it. Another great thing about a debit card is that if you are trying to purchase a $200 item and you have $199.99 in your bank, the transaction will not go through. Also, a debit card is more secure than a credit card. You are assigned a 4 digit pin that you need to enter every time you need to buy something.

Disadvantages

You do not get any rewards points at all. Let’s say you purchased $5000 worth of goods in a month, you do not have any reward points to show for it. If you are in need to purchase something and you will not get paid till the end of the week, you have to wait until the end of the week to make that purchase.

Credit Card

A credit card works this way. You apply for it and if you are approved, you will get a limit you can use. You have to make monthly payments on the credit card. The goal is to pay the whole amount in full. If you do not, you will have to pay interest charges and ruin your credit score.

Advantages

It is very rewarding if you have a rewards card and you make a lot of purchasing and pay it off at the end of the month. I have a co-worker who uses his credit card for everything. This resulted in a free trip to Las Vegas using this rewards points.

Disadvantages

The disadvantages are that you are getting in a lot of DEBT using your credit card. The credit card allows you to make purchases even if you do not have money in the bank. Also, when your credit card statement arrives, you do not have to pay the amount in full. You have to pay a minimum amount. (Interest charges can drown a person in debt)

Now that you have seen the two arguments, which one would you prefer. My experience says that if you can manage your money and control your spending, a credit card can be very rewarding. However, if you have no idea where your money goes, the best way to go with is a debit card.

Now it’s your turn.  Which card (debit or credit) do you use more and why?

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