Which is Better: Credit Card or Debit Card?

Let's compare them. Are they the same? Well, physically they are the same – just a piece of plastic. But they serve different purposes. Well then, what are their differences? Which one is better?

Credit card is for you to buy things without paying first. The bank will pay for you first and at the end of the month, you pay back the bank. You can decide to pay back the bank in full or partial. When you pay the bank in partial, basically you owe the bank. You’re actually taking a loan from bank. So the bank will charge you the interest based on the amount of loan you borrow.

Debit card on the other hand is for you to buy things with the amount of cash that you have in your savings account. Unlike credit card, with debit card you’re actually paying yourself for the things that you buy and the money is deducted directly from your savings or current account once you swap you card.

In my personal opinion, the following factors determine whether you should choose credit or debit card.

Which one is more convenient?
I had a debit card before (VISA Electron) and it seems like the problem with that is not well accepted in a lot of places. Debit cards are not widely accepted, and are not as popular as credit cards. However, when I traveled to the USA last year, debit card seems like as widely accepted as credit card. Not only that, I can use the debit card as an ATM card to withdraw cashes without any extra charges.

Which one has reward points?
Does debit card have a reward points system? Not that I’m aware of. One of the reasons I choose credit card over debit card is because of the reward points. You can collect points when you spend your money with the credit cards and you can redeem the points for cash or other stuff. So far, I have redeemed the cash and 6 months prepaid phone card. I love this reward points system.

Which one has cheaper fees?
I have been using credit cards more than 5 years and I haven’t paid them a single-cent. Just call them to waive the fees or cancel your existing card and apply for the new one with promotion. Usually the promotion will give you free annual fees. Some even give you free for life time. As for the debit card, I think the fees should be free as well.

Which one is better control of your finances?
People says sing debit card can gain more control of your finances because you can’t spent the money more than what you have. My belief is that if you can’t control your own finance, no matter what cards you’re using, you will end up with trouble (e.g. overdraft facility in your current account). Using the debit card is just an excuse. If you can control your own finance (aware of your spending), it is really doesn’t matter that which card you’re using. As long as you can use credit cards wisely, I don't see there is a problem with that.

Is there anything that I left out? I personally prefer credit card because it is convenient and I can use it all around the world. Not only that I don’t need to pay for the fees at all, at the same time I can enjoy the reward points. If debit cards can fulfill all these requirements above, I don’t mind using it as I’ve already used the credit card as debit card or cash. I always pay my payment in full every month.

So for me, credit card is still a better choice at this moment. What is your choice? Well, here is what people say:

Credit cards are great to be kept, its like an instant borrower for me when I need it. For example, entering hospital with a signed credit card means instant curing process. Using credit card on a daily basis could be a trap. No matter how discipline you are, you may still be trapped once in a while...

Debit Card is for those who are not qualified for credit card yet.

I do not see any use of debit card at all unless one day they offer higher compound return rate than FD, then may be its worth while.

I use debit cards for most of my expenses. I just don't trust myself with a credit card. My inability to pay bills on time quickly outweighs the rewards programs.

Credit card is useful especially for emergency cash. Debit card may come into problem if you do not have enough cash in your accounts. For those who are not qualified for credit cards, it leaves them no choice to get the debit card instead. This is especially true for those do not have permanent job.

If you can’t really control your spending, debit card is the only way to go. I agree that sometimes spending is really quite fun and enjoying. But in my opinion, we have to somehow learn how to control our spending rather than using the debit card to force us to control our spending. It should be done in proactive way rather than reactive way. Using the debit card to control our spending is a reactive way.

The best thing about credit cards is rewards. Most consumers in US prefer cash back credit cards. However, those cards are for consumers with good credit only. The biggest problem with credit cards is that you have to be approved for one. And today with all that banking crisis going on it is even harder to get approved.

How To Get Free Samples For Almost Anything