Credit Card Vs. Debit Card - What Are The Main Differences?
Posted by Nick Niesen on October 29th, 2010
What is a Debit Card?
Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump. When you use your debit card to make a purchase, it?s just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account. In the case of a credit card, you can pay just 5% of your bill amount and carry forward the balance to be paid the next time. You do not have to settle all in one go. This is referred to as revolving credit.
What is a Credit Card?
In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money ?loaned? to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR). While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.
Credit Cards offer Better Protection!
MasterCard and Visa offer zero-liability protection where you won?t pay any charges if someone uses your credit card to make an unauthorized purchase.
Additional protection against fraudulent use of your credit or debit cards may be available through your homeowner?s or renter?s insurance. Check your policy or with your agent for more information about your coverage.
Also be aware that you should contact your card issuer by certified letter, return receipt requested, after you?ve contacted them by phone to protect your consumer rights.
As for which card to use for what type of purchase, most experts agree that you should use your debit card for the same type of purchases you?d make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at the grocery store or gas station (provided you have sufficient funds to cover these purchases of course).
Credit Card Purchase Disputes
With your debit card you are stuck dealing with the merchant directly to
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About the AuthorNick Niesen
Joined: April 29th, 2015
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