Credit card và debit card
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Eric Estevez is financial professional for a large multinational corporation. His experience is relevant lớn both business và personal finance topics.
Have sầu you ever been confused about the difference between a credit & a debit card? It’s easy lớn see why. Debit cards & credit cards are accepted at many of the same places. They both offer convenience & eliminate the need lớn carry cash. They even look similar.
The fundamental difference between a debit card and a credit card trương mục is where the cards pull the money. A debit thẻ takes it from your banking trương mục, và a credit card charges it to lớn your credit line.
What Is a Debit Card?
Debit cards offer the convenience of a credit thẻ but work differently. Debit cards draw money directly from your checking account when you make the purchase. They vì chưng this by placing a hold on the amount of the purchase. Then the merchant sends in the transaction khổng lồ their bank, & it is transferred khổng lồ the merchant"s tài khoản. It can take a few days for this to lớn happen, and the hold may drop off before the transaction goes through.
It’s important to lớn keep a running balance of your checking tài khoản khổng lồ make sure you vị not accidentally overdraw your trương mục.
You will have a personal identification number (PIN) khổng lồ use with your debit card at stores or ATMs. However, you can also use your debit card without a PIN at most merchants. You will sign the receipt like you would with a credit thẻ. Below are some other facts regarding debit cards.
You won"t pay interest on your purchases.Your credit history will be unaffected by debit card spending.Paying with debit will take the money from your tài khoản pretty much immediately.
What Is a Credit Card?
A credit thẻ is a card that allows you to lớn borrow money against a line of credit, otherwise known as the card’s credit limit. You use the thẻ khổng lồ make basic transactions, which are reflected on your bill; the bank pays the merchant, và later, when you receive sầu your bill, you pay the ngân hàng.
You will be charged intereston your purchases. To avoid paying interest, don"t carry a balance over from month khổng lồ month. Credit cards have sầu high-interestrates, and your credit thẻ balance & payment history can affect your credit score.
Paying on time & in full will help you avoid interest & late fees and maintain or even improve your credit score.
The bank decides your credit limit based on your credit history.Generally, you no longer have sầu to lớn sign for in-person credit thẻ purchases. You will owe interest on your purchases if not paid off in 30 days.
Debit Cards vs. Credit Cards
Debit cards make it more difficult khổng lồ overspend since you"re limited khổng lồ only the amount available in your checking trương mục.
With a credit thẻ, you run the risk of spending beyond your means. Just because your credit limit is $1,000 doesn"t mean you can afford that sort of spending in your monthly budget.
Plus, debit cards offer the same convenience as credit without requiring you lớn borrow money or pay interest or fees on your purchases. Choosing debit is great for managing your money and helping you live within your means.
On the other hand, some credit cards offer additional insurance on purchases and can make it easier to request a refund or a return. However, many companies are reducing or withdrawing these benefits.
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You should carefully read the disclosure information for your credit thẻ to lớn understand the benefits.
Finally, credit cards can help cover you in an emergency, giving you a month to lớn come up with the cash before the bill comes due. This safety net could be helpful if you find yourself needing to pay for something big before a kiểm tra comes in but beware: depending on credit for emergency spending sets you up for expensive sầu interest if you can"t pay in full by the due date. A better solution is lớn keep an emergency fund on h&.
Choosing the Best Card for the Situation
When trying to lớn determine whether khổng lồ use a credit card or a debit card, you should be honest with yourself và your ability lớn handle credit.
If you have sầu spending issues, it is better lớn use your debit card whenever possible, lớn prsự kiện yourself from falling inkhổng lồ credit thẻ debt.
Choosing the best card lớn use also depends on the purchase. Some rental oto agencies và hotels make using a debit thẻ impossible, or at least inconvenient. For example, they may require utility bills, personal references, pay stubs, or other proof of ability khổng lồ pay before they accept your booking. You may find using a credit card to lớn be less of a headađậy.
Using a credit thẻ might also be the better option if you want to take advantage of credit card reward programs. But this system only works in your favor if you pay off the balance in full each month.
If you find yourself carrying a balance, you may save sầu in rewards, but you will wind up paying as much or more in interest.
If you"re trying to lớn build up your credit score, choose khổng lồ use your credit card occasionally. Making charges và paying your bill on time will create a record of responsible, creditworthy behavior, which is reported lớn the credit bureaus and reflected on your credit report.
Fraud Protection
Identity theft and fraud are risks lớn guard against whether you choose debit or credit. That"s why it"s important khổng lồ know what protections are included with your card.
If your credit or debit card information has been compromised, liên hệ your bank immediately. Most banks have a 24-hour Hỗ trợ tư vấn you can Call. The sooner you điện thoại tư vấn, the better. You won"t be liable for fraudulent charges made with your ATM or debit card after your report that it is missing or stolen. If someone uses your debit thẻ before you report it lost or stolen, your liability varies depending on how quickly you report it:
Within two business days: up lớn $50More than two business days but less than 60 calendar days after your statement is sent khổng lồ you: $500More than 60 calendar days after your statement is sent to lớn you: all of the money in your account
Thanks to lớn the Fair Credit Billing Act, the most you"ll be liable for if your credit card is stolen is $50. Just as with a debit thẻ, you should immediately report the thẻ as stolen by calling the thẻ issuer.
After you report the missing card, follow up with a written statement by letter or gmail. Very carefully screen your tài khoản for charges you didn"t make & report them to the ngân hàng.
Monitor your credit report khổng lồ make sure that your identity was not stolen. If your credit thẻ was compromised, you might even freeze your credit to help protect against further fraud.
