Debit cards are used throughout the world for quick access to your checking or savings account. Most stores and businesses today accept debit cards as forms of payment; they are much safer than carrying around cash, they are generally free when provided by your financial institution and many times businesses offer cash back for those using their debit cards. Debit cards are linked directly to your personal accounts.
The transactions you make using your debit card is much like writing a check or withdrawing money from your account. The money is not paid back with interest; it’s there in your account and that is the only factor that determines your spending limits. Debit cards allow you to withdraw cash at automatic teller machines, pay for items at stores and businesses; they offer easy access to your bank accounts.
The most important factor to remember when using a debit card is writing the transaction down. Because of their electronic ease of use; most individuals will forget time to time to post their transaction. This can result in insufficient funds for future purchases and needs. For those wishing to take advantage of their debit card, it’s always important to shop around at varying financial institutions. Some offer percentages back on certain purchases; so basically, you’re earning money while using your card.
Credit cards are used based upon your credit availability with the credit card institution. Unlike debit cards, credit cards are advances or purchases made on items when the money is not readily available. In other words, you are buying on credit. You promise to pay the amount back to the credit card institution within a given set period of time; if not paid in full within those terms; interest and fees will be added to the amount you owe.
Unlike debit cards, which are directly linked to your personal banking accounts and require no credit history check; credit cards are given to those with good credit standing. And unlike debit cards which draw off of funds readily available, credit cards are a means for customers to buy items on funds that are not readily available. Therefore, if you spend money on something and cannot pay it back within a 30 day period of time to your credit card company; you instantly increase the cost of that item with added interest. Something that cost you very little can end up costing you quiet a bit over time.
Credit cards base their credit lines for individuals on their ability to pay back the loan or credit. Most charge annual percentage rates on credit cards; some of which are very high. Just like debit cards, credit card companies offer their clients certain cash back bonuses and incentives. If you are looking for a credit card with these types of incentives and extras; take into consideration the entire package; interest rates, late fees, and other membership dues.
