Debit Cards Vs Credit Cards

When you are travelling overseas you will have to spend money on hotels and other purchases. Many people will want to avoid carrying around large sums of money with them but they will still want to have fast access to money. Debit cards and credit cards can give you this fast access to money while you are travelling and will also allow you to avoid carrying money around in a secure and safe way. This article will explain what a credit card and debit card is and what are the advantages and disadvantages of each of the type of payment.

What is a credit card?

A credit card is a card that allows you to make purchases and spend money. Instead of using your own money the credit card will draw money from a credit balance that you will have to pay back. Interest will usually be charged on any money that owes on the credit card however you will be able to make large purchases and pay off the sum at a later date. Credit cards can be used in most stores, in many ATM’s and online.

What is a debit card?

A debit card can be used in most places that accepts a credit card and in a very similar manner. However the main difference between debit cards and credit cards is that with a debit card you will use your own money. When you get a debit card you will load money onto the card. Once the money is on the card you can then use your debit card like a credit card.

What are the advantages?

The main advantage of a debit card is that you will use your own money and as a result you will avoid paying interest on any money that owes on the card. This will save you money as the interest payments on credit cards can be quite high. The main advantage of credit cards is that you are not using your own money to make the purchase. If you would like to buy something now and pay off the purchase over a period of time then the credit card will allow you to do so.

What are the disadvantages?

While the debit card will save you money in interest charges there are often many fees that are charged to the card when in use. The average debit card will charge you money when you load money onto the card and with many of the transactions. If you use the card in a store to make a purchase you will have to pay a fee and if you withdraw money from the card you will also have to pay a fee. While the credit card has the disadvantage of the high interest rates there are many fees associated with the debit cards that can increase the amount that you pay. Furthermore, by using you own money with the debit cards you will not be able to make large purchases and pay them off over time.

Credit cards and debit cards are a great way to spend money online, overseas and in stores. However both of the cards come with some disadvantages and some advantages. While the debit cards are a great way to avoid interest rates they will not let you make any large purchases if you do not have the money upfront, whereas credits will allow you to buy the item and pay off the amount over time. If you would like to know more about debit cards vs. credit cards then please view our comparison tables here.

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