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Credit Or Debit?

In today's world, it seems that almost any topic is open for debate. While I was gathering facts for this article, I was quite surprised to find some of the issues I thought were settled are actually still being openly discussed.

Many times people use the terms 'credit card,' and 'debit card' in the same breath, but they are actually two very different things. A credit card is just as it sounds; when you use it, you are making purchases on credit. On the other hand, when you use a debit card, you are extracting money from your bank account to pay for the purchase.

Let's take a look at each one in depth.

Credit Cards

You may think all credit cards are alike, but just like fingerprints, they differ greatly. Knowing that, it would only make sense to shop around in order to get the best terms that you can find. Some people pay their credit cards off in full monthly, and if you're one of those lucky few that can afford to do this, then you should probably look for a credit card with no annual fee or one that offers bonuses to their card holders. If you are the type of person that carries a balance on your credit card, then you should look for a card that will charge the least amount of interest.

The bottom line is that you need to know the terms before agreeing to accept the card. Here's a short list of those things that you should ask (or read in the terms section of the paperwork)

The information about credit and debit cards presented here will do one of two things: either it will reinforce what you know about credit and debit cards or it will teach you something new. Both are good outcomes.

* What is the annual percentage rate? Will it change after a specified period of time?
* How long is the grace period? (That time between charges and when the interest on those charges begins to accrue.)
* Is there an annual fee? Is so, how much?
* How are finance charges accumulated?
* What amount are late fee payments?
* Will I be charged if I transfer balances to and from this account?
* What are the fees on cash advances?
* What happens if I go over my credit limit?

In most stores or businesses, the retailer does not charge the customer any fees for using a credit card. And Federal regulation gives the consumer purchase protection. In other words, if you have a problem with merchandise or services and make a good faith effort to reconcile that problem with the seller to no avail; you have the right to withhold payment for the merchandise or services.

Debit Cards

Over the last two years, the use of debit cards has doubled; often when asked debit or credit; the answer is debit more and more. In fact, twenty percent of all credit transactions are now done with a debit card. No interest fees are charged on debit cards; however, at certain retailers, they do charge a small fee for using them. Anytime you make a purchase, the money is automatically withdrawn from your checking or savings account. Debit cards look like credit cards and to a certain extent act like one. But because the amount comes straight out of your bank account, you may have a financial fiasco if a debit card falls into the wrong hands or if you forget to deduct the transaction amount when reconciling your account balance.

No matter which card you choose to use'a credit card or a debit card'you will experience convenience and ease-of-transactions. Simply decide what's right for your life!

Sometimes it's tough to sort out all the details related to this subject, but I'm positive you'll have no trouble making sense of the information presented above.