Credit Cards Vs Debit Cards Which Is Better

Debit Cards Credit Cards vs. Debit Cards - Which Is Better? Tip! World wide acceptability: Most free prepaid debit cards are accepted at locations and shopping outlets which display the logo of the debit card company. However there may be some places and shops where which your free prepaid debit card may not be accepted. In this second of a series on credit cards we're going to cover the advantages and disadvantages of credit cards versus debit cards. To understand these differences we first have to explain how a credit card and debit card work, at least generally speaking. In general, the way a credit card works is you go to a store, or these days even online, pick out the item you want, plug in your credit card number and your purchase is complete. The item isn't actually paid for yet, as far as you're concerned, because no money has changed hands. After the transaction the merchant will receive payment from the credit card company who issued you the card, usually within 30 days and in turn you will receive a bill from your credit card company, also within 30 days, at which time you must remit at least a partial payment. Each credit card company has different terms. Some, like American Express, require you to pay your balance in full. Tip! Prepaid debit cards are easier to apply for than credit cards. Often, they require no bank account, no employment verification, no credit checks and no security deposit. The way a debit card works is basically the same in most respects. You make your purchase, plug in your number or swipe your card and the purchase goes through. The merchant, again, will get paid by the company who issued you the debit card. Here is where the difference is. With a debit card the money already has to be in your account. In other words, you've already paid in a certain amount of money to be available to your debit card. By using the card the money is simply transferred out of your account and your balance is reduced until it reaches zero, at which time you have to pay more money into the account or the card can't be used. Tip! Prepaid debit cards are a safer way for employees to receive their salaries. Statistics indicate that in the United States over 3 million payroll checks are stolen each year. The advantages of a credit card are that you don't have to have the money available at that time to pay for your purchase. You will usually have at least 30 days to pay for the item and even then, based on the terms of your card, may not even have to pay the whole balance. The disadvantages of a credit card is that it becomes way too easy to use them and run up large balances. Then when it comes time to even pay partial payments it can be very difficult to make those payments. Add to that the finance charges and people with credit cards can run up large debts that they sometimes never recover from. The advantages of a debit card is that you know you have the money in your account to pay for the item and you don't have to worry about future bills or finance charges. It's as good as cash without having to carry cash around with you. The disadvantages of a debit card is that if you don't have the money in your debit card account then you can't use it. In a sense it's pretty much the same as if you don't have cash on you. Many people feel that a debit card is just a compact cash equivalent and doesn't really offer much more convenience than cash. Others feel it is the only sure way to prevent yourself from falling into a financial hole that you may never recover from. Tip! You can use a prepaid debit card to send money to your loved ones abroad or to your college age children away at school. Some debit cards allow you to have two cards for one account and in this case you will be able to keep one for yourself and send the second to your loved one. The debates between credit and debit cards will probably go on forever. Michael Russell Your Independent guide to Credit Cards Get Free Articles From ArticleBuilder.net		More Articles Articles Description Site Map A Credit Repair Scam How To Avoid Being A Statistic Instant Approval Credit Cards Online How They Work Personal Savings Rate And Credit Card Debt In The United Sta Credit Cards To Get Or Not To Get That Is The Question Choosing Cash Back Credit Cards Instant Approval Credit Cards For Bad Credit Instant Approval Credit Cards The New Plastic Cash The Many Flavors Of Rewards Credit Cards How Bankruptcy Affects Interest Rates On Loans And Credit Ca     Search This Site
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