Debit Card vs Credit Card (2/2)
In the first part of debit vs credit card, we tackled the vital differences between debit cards and credit cards. Here, we will explore the advantages and disadvantages of both products.
The Advantages of Debit Cards
Money is directly deducted from your personal savings account, so you’ll never have trouble with debt! Debit cards are perfect for those constantly struggling with outstanding credit card bills.
Debit cards are simple to apply for when you have a savings or current account with a bank. Credit evaluations and assessments are no longer necessary!
The Disadvantages of Debit Cards
There is a possibility of incurring overdraft charges when you make payments that amount to more than your savings/ checking account balance.
Credit cards offer more promotions, rewards and value added services.
Moving on to credit cards…
The Advantages of Credit Cards
Credit cards let you spend using money you don’t have yet, as long as they fall within the credit limit.
Credit cards can improve credit score, especially when the bills are consistently paid on time. A better credit score eases your future loan applications, and even allows you to access more favourable interest rates.
The Disadvantages of Credit Card
The use of credit cards is accompanied with interest charges at various rates. These fees will continue to increase if not paid at a specific time frame. Your purchases may be costing you more than you think!
You are using money that is not yours. There is always a risk that you will not have enough to repay credit card bills at the end of every month, which could lead to accumulating debt.