The Advantages and Disadvantages between Using Credit and Debit Cards
Almost everyone has a payment card nowadays. By the way, did you know that the Danish term for “payment card” is “betalingskort” Even children have credit cards as an extension to the cards of their parents. College students certainly have their own. And anyone can be as guilty when it comes to overspending.
While credit cards are quite convenient and useful, it can be abused. That is why some depend on their debit cards instead. Still, there are instances when a credit card is more ideal for payment card transactions.
Why Use Debit Cards
Since people tend to overspend when using credit cards, some people want to avoid using them. The best alternative is to use a debit card. While certain debit cards are designed without a physical card, the debit card almost just looks like a credit card. But you can only use the debit card when the account has a balance. You cannot spend more than the balance. This means that you cannot spend more than how much you can afford. Unlike using a credit card for payment card transactions, you cannot delay payment.
The debit cards are also known as electronic checks. Again, there are debit cards that are designed just for the use of Internet transactions. This type of debit account does not have a physical card. On the other hand, you can also have an ATM card which you can withdraw cash from.
In summary, there are three types of debit cards. Debit cards require electronic authorization when used as a payment card. As soon as this is given, the bank would then debit the account promptly. Then a debit card can also be used in an offline debit system. If you plan to use the debit card offline you should look for logos such as Visa and Mastercard. The card holder should be aware that there is usually a limit as to how much one can charge in a day though. Lastly, there are prepaid debit cards too. You can simply inject some money into the card account. This type of debit card can be used both online and offline.
Credit Cards versus Debit Cards
The good thing about using a credit card is that you don’t need a balance to be able to make a purchase. But you would have to pay the bills sometime though. You can pay the bills in full to avoid the interest charges though. On the other hand, you should have sufficient balance in the debit account to be able to use it. But then again because of this you can avoid overspending.
With a credit card (or “kreditkort” for Danish), you can also make a dispute claim especially that you still have not paid the amount. When there are problematic transactions or when there have been an unauthorized charge, one can make the complaint through the issuing bank. The credit card company even gives cardholders up to 2 months to make the complaint. But with a debit card, your money is already deducted from the account. And you can only make a complaint in less than a week.
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