Which is better for you? Credit or debit cards? The Equifax Finance Blog gives the pros and cons of each in their new article, “
Tips For Choosing Between Paying With Debit or Credit.” This key information can help you live a cash-free lifestyle, as well as help you remove the need for paper bills and statements by knowing which plastic to use for your credit score.
Credit Cards:
- Pro – When you use and pay down a credit card, you help build your credit history.
- Pro – Less risk of major financial and credit file damage from an identity thief.
- Pro – Higher likelihood of being able to contest fraudulent charges.
- Pro – Rewards can help buy things or pay down your balance.
- Con – It’s easy to over spend using credit cards; since payment for your purchases is delayed.
- Con – Using a credit card to earn rewards could cause you to spend more than you really can afford.
Debit cards:
- Pro – The money is taken directly out of your checking account, so no interest and no late payment fees.
- Pro – Having debit cards has no negative impact on your credit.
- Con – Having debit cards has no positive impact on your credit.
- Con – If stolen, the thief can wipe out your bank account.
- Con – Many banks offer little protection against fraudulent use; some do, they just may require a fee
- Con – If you or a thief overdraws, you will be hit with substantial fees.
As you can see, there are advantages and disadvantages to both credit and debit cards, and which you use, and when, and how often, is up to you and what works best for your financial lifestyle.
If you’re looking for more tips on building credit, saving money, financial management,
protection from identity theft and more, visit the Equifax Finance Blog!
