Debit card vs. Credit card use

Debit card Credit card
  1. Is like cash.  The money comes directly from your checking account.
  2. Be sure to know what your checking account balance is.  If you spend more than you have, your purchase may be declined or the bank might charge an overdraft fee.
  3. Some banks offer a fraud liability protection program so if your debit card is lost or stolen, you won’t be liable for fraudulent purchases.  You can buy the fraud protection from your bank if it is not offered with your checking account.
  4. Change your PIN number on an annual basis or more frequently if you feel more comfortable.
  5. If you use on-line banking, make sure your passwords are strong.  Some banks use a two password system for your protection.
  1. You are using someone else’s money (card issuer) and you will pay it back later.
  2. This can be an easy way to build up your credit rating.
  3. You are billed once a month for purchases.  If you pay more than the minimum amount, you can reduce (or avoid) the amount of interest you pay.  Be aware that the interest charged may be high.
  4. Many credit cards are bundled with rewards that allow you to earn points that are redeemable for travel or merchandise or even cash-back programs.  Credit card issues also offer teaser programs for cash advances.
  5. Some credit cards offer protection if you buy merchandise that turns out to be defective.
  6. Be aware that some credit cards charge an annual fee.

Some places where a credit card is safer to use:

  1. On line purchases.
  2. Big ticket items
  3. Renting a car
  4. Restaurants
  5. Buy now, take delivery later
  6. Future travel
  7. Gas stations
  8. Hotels

Read full consumer tips Debit Card vs Credit Card 01.31.14.