Credit Can Be Preferable to Debit

[Oct 17, 2007.]

Each pass through a supermarket checkout line is decision time for consumers, who must decide whether to use a debit card or credit card for cashless and check-free purchases.

While debit card use appears to have grown dramatically in recent years, there are still some good reasons for using old-fashioned credit cards.

For instance, Consumer Reports notes that using a credit card can actually cost you less money. This is because some financial institutions assess fees for each debit card transaction that involves using a PIN number.
In addition, with credit cards, you don't have to worry about your account being overdrawn. As a result, using credit can be less stressful than using debit cards, especially if you have limited funds available in your bank account.

With cash back credit cards, you can take advantage of a number of rewards programs. Consequently, you can benefit from such rewards as cash back bonuses and air miles. Such rewards may be either less plentiful with debit cards or even non-existent.

Credit cards can also offer you extra power as a consumer. This is because it's easier to cancel a charge if you happen to become involved in a dispute with a merchant. Simply put, credit cards offer a type of consumer protection that debit cards do not.

Moreover, if your credit card is lost or stolen, you'll only be responsible for a small portion of the charges incurred. However, if your debit card is taken from you, you may be forced to pay hundreds of dollars' worth of unauthorized charges.

Of course, with credit, there's always the temptation to overspend. However, if you are determined to pay off your balance each month, you could actually find yourself with money to spare. With the holidays approaching, using credit responsibly may be the best gift you could give yourself at this time of year.

Julie Ann Amos
October 17th 2007

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