Debit Card Credit Card Visa Master Card

Why do we have a credit card?  Why do we have a debit card?  Why do we have both or either of them?  What can we benefit in them from life?  I am pretty sure that these are some questions that we usually think about when we first open our first or new checking account with a bank.  Your debit card is basically a card that you use to withdraw money from your account.  A credit card carries a line of credit, whereas a debit card does not.  There are some benefits and drawbacks to each card, and I will describe them within a few simple terms.

How you use these two cards can be either be beneficial or disadvantageous, depending on which route you take.  Make sure that the route that you take on making transactions on either your debit card or credit card is the route that would make your life easier, not more and more miserable each and every day.  I don’t know about you guys, but I rarely use cash now for small purchases, and I hate having to carry loads of change in my pocket.  Also, make sure that you ask your financial advisor at your bank to see what type of rewards your debit card or credit card gives you while you make those transactions; they could be redeemable points for gift cards, cash back, airline miles, etc. 

But, there is a catch to using either card.  If you start to overdo your spending on your debit card, your checking account will be overdrawn before you know it; furthermore, if you have your credit card either maxed out or if you have a high balance on your credit card, and you do not have enough money in your checking account to pay the balance every month, you will be in hot water with both your bank and your credit card company.  What should you do about this?  My suggestion is that use your debit card for small purchases such as light groceries, fast-food dining, or small items such as low-price pet food or DVDs that are on sale at Best Buy or Fry’s.  Use your credit card for the bigger purchases such as gasoline, or hotel or rental-car reservations.  Because who would want to take out $250 for a rental car from their debit card, or pay just $5.00 for a hamburger meal at McDonald’s with their credit card?  No one, right?  Well, unless the place does not take Visa or MasterCard (or even American Express), then you are pretty much screwed with your own leftover change from your pocket.

To conclude, there are certain rules as to which card to use for which occasion.  The first rule that I usually tell everyone is that if you are planning on using your debit card for POS (point-of-sales) transactions, check your balance on your checking account first, otherwise, if your balance does not have any sufficient funds, your debit card transaction(s) will be declined.  The second rule is regarding your uses of your credit card.  Write down the date and the payment that is due on your card, and pay it off a little at a time (I usually do it $100 at a time if I have a not-so-high of a credit card balance); if you pay it off at just a minimum balance, you will be charged interest for the upcoming months, and it will take a long time for you to pay all of that debt off.