Credit cards vs Debit Cards: The Better Option
In essence, credit cards and debit cards are same in function. It allows you to use cards in place of cash to purchase various products and services. They appear almost identical in that both having a 16-digit card number along with expiration dates and PIN codes. However, that is where their likeness ends. Credit cards and debit cards entail vastly different conditions. So which one is better? Let’s find out.
Credit cards are cards which you can use to purchase products and services by using the money of a financial institution which you will pay with interest at a later date. Debit cards, meanwhile, are cards that are tied to your checking or savings account. The money you use in purchasing products and services are your own money.
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Credit Card |
Debit Card |
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Pros |
- rewards and discounts are abundant when you use credit cards - it is a great way to have a good credit score to raise your credit ratings for loans if you are able to pay your monthly dues consistently - credit cards provide warranty - users are usually not held liable for breach in security |
- it encourages frugality and controlled spending as you can spend only what you have in our bank - there are usually no interest in using debit cards and no fees for anything except if you overdraft - you can use it just like a credit card to purchase products and services - application is easy as long as you have a valid source of funds |
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Cons |
- it encourages spending as it incurs a monthly interest whether you spend or not - you would have to pay interest to spend the money you don’t have yet - the application process is hard depending on the person applying - poor security |
- if security is breached there is a big chance that your lost money won’t be returned - the amount you can spend is limited by your funds - it doesn’t help in increasing your credit rating |
The better card option will depend on your preference. Both debit and credit cards present a valid argument to be the better card however, depending on your goal and capacity, one card is better for you than the other.
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