There are many payment options available nowadays: cash, checks, credit and debit cards and other types of cards. Soon after their invention, credit cards became widely popular in American society – one of the top payment methods. However, after the financial crises hit the wallets of consumers, the statistics have shown that now credit cards are out and debit cards are in.
While it might seem that debit cards are very safe and convenient, there are several cons to this payment option too. On the plus side, debit cards are very easy to obtain and are equivalents of cash, i.e. they let you pay for your purchases with your own money while not having to carry vast amounts of cash. However, if your debit card information is stolen, then you have much more responsibility for unauthorized payments than with the credit card. So paying with a debit card for online transactions is not the best idea. Another drawback is that debit cards don’t help you improve your credit score while they might “help” you worsen it: overdraft and other debit card fees are reported to credit bureaus and you cannot dispute them once they are incurred. Before choosing one or another method of payment you should consider all the pros and cons of each and also the purposes that you use them for as well as your long term goals.
Sources:
http://money.cnn.com/2009/11/02/pf/debit_card_pitfalls/index.htm
http://www.mortgageloan.com/credit-versus-debit-cards-know-the-differences-2845
http://www.sayeducate.com/2009/05/13/debit-card-usage-increases-credit-card-usage-decreases/
I think it is important to have both a debit and credit card because there are instances in which the benefits to both become necessary.
ReplyDelete-Lindsey Connell