Six Reasons to Choose Credit Over Debit

Credit Cards and Debit Cards both have an important place in our financial lives. But there are advantages to using one over the other. Remember Debit Cards withdraw money from your checking account immediately, at least in theory. Even though, Credit Cards are tied to a personal loan, it’s smarter to use a Credit Card over a Debit Card sometimes.

1.Credit costs you less.
Some banks charge customers for so-called in-store “PIN-based” debit card transactions. Fees range from .25 cents to $1.00, depending on the bank, Consumer Reports Money Advisor said. By choosing a “signature-based” transaction, you sidestep these fees.

2.Credit won’t result in a hold on your account.
When you use a debit card to reserve a hotel, rent a car or even fill up your tank, vendors sometimes put a “block” on your checking account until the transaction is processed – and the amount the “block” can significantly exceed the purchase price. If you’re running a low balance, this can result in punishing overdraft charges.

3.Credit makes it easier to cover your bases.
If you haven’t been keeping a close eye on your bank balance, it might be a good idea to choose the credit option on your debit card because it takes longer for the money to be debited from your account (usually around two days).

4.Credit allows interest to accrue.
If you religiously pay off your balance at the end of the month, you stand to make more money by paying with a no fee credit card. Why? Because you can allow your money to grow in an interest-bearing account until your bill comes due.

5.Credit gives you an out.
Using a traditional credit card makes it easier to reverse the charges if you get into a dispute with a merchant or vendor.

6.Credit shields you from liability.
If someone gets hold of your credit card, you’re typically responsible for only $50.00 worth of fraudulent charges. If your debit card is stolen, you may be liable for as much as $500.00 in unauthorized purchases, unless you report the theft within two business days.

Check with your bank or credit union for your account details.

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