6 Advantages Of Using A Debit Card Instead Of A Credit Card – Hometown Station | KHTS FM 98.1 & AM 1220 – Santa Clarita Radio

For many of us, pulling out a credit card and using it to pay for anything and everything is second nature; a reflex that we’ve developed over the years.

However, if you’ve got a debit card in your wallet or purse as well, it’s often a better idea to use this for making purchases. So why is it worth reducing the amount you use your credit card? Let’s go over the main reasons to rethink your spending habits.

You’ll avoid interest charges

Debit cards aren’t subject to interest, because of course you’ll be spending your own money directly from your checking account, rather than effectively borrowing the cash from the bank as you’re doing with a credit card.

So if your credit card is subject to steep rates, which is likely at the moment, you could save by paying with a debit card instead.

You won’t incur withdrawal fees

While you can withdraw cash from an ATM using a credit card, this isn’t a good move because most providers charge extortionate fees when they are used in this way, making it harder to stick to a budget.

Meanwhile, with a debit card, you can take as much moolah out as you desire without being hit with additional costs, on top of whatever the ATM operator might require to cover their own expenses.

You can sidestep yearly fees as well

While not all credit cards come with annual account fees, there are those that do come with additional costs associated with their upkeep. And if you’re looking to invest to build wealth, every penny counts.

On the other hand, unless you’ve gone for a particular package which entitles you to other perks and privileges, there won’t be a price to pay year after year for using your credit card. That brings us on to:

How to find a debit card that suits your needs

If you want to find the right prepaid card with no fees attached, comparing your options online is worthwhile.

You can also ask friends and family for recommendations, as you could not only identify high-quality providers in this way, but also learn about less compelling alternatives that are worth avoiding.

You’ll be encouraged to manage your money more responsibly

One of the major downsides of credit cards is that it can feel like you’ve been given access to ‘free’ money, right up until the point you need to pay down the balance and you discover that you’ve spent a fortune without really thinking about it.

Conversely, when you’re using a debit card, you’ve got a set amount in your account that you know you can use, and so every time you whip it out you’ll know that it is taking a slice off the total, and bringing you closer to zero.

This automatically makes you think harder about what you spend your money on, so if you’re prone to misusing a credit card, this could be the solution to your bad habits.

Better still, modern banking brands often have impressive mobile apps which track your spending and alert you to all sorts of potential issues before they arise. So rather than going hog wild with a credit card, a debit card could pave your way to a more secure financial future.

Your credit score won’t be compromised by late payments

Some argue against using debit cards because if you go into your overdraft, your bank will charge you for this incursion.

However, credit cards are arguably much worse because missing a payment will hurt your credit score and leave a black mark on your history that will interfere with your ability to take out loans further down the line.

Going into the red with a debit card, on the other hand, doesn’t do anything to your credit score. It’s a fine balance to strike, since using a credit card responsibly does build your credit history. But if you can’t trust yourself to be careful with it, the benefits won’t outweigh the downsides.

You can be confident your card will be accepted almost everywhere

The credit card market is a bit more diverse when it comes to the payment systems that are used and the brands that are involved in it. The upshot is that there are some retailers, both online and off, that will only accept certain mainstream payment options, to the exclusion of a credit card you’re reliant on.

Debit cards aren’t as encumbered, and so if you want to buy anything from a brick-and-mortar outlet or a web-based store, there’s a much higher likelihood that your particular method will be supported.

Final thoughts

You can still use both a credit card and a debit card in an efficient and responsible way, but actively balancing this is necessary to avoid some of the snafus mentioned above.

Putting more payments through on your debit card makes sense if you’ve got the cash to spare, and you know that this will stem your urge to splurge.

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