The debit card – also known as the ATM card – is one of the most popular methods of payment in the United States, if not the world. When you use your debit card to pay for something it takes the cash out of your bank account immediately. Just as popular, if not more so, is the credit card. Most people have both, prompting the question “Is it better to use my debit card or my credit card?” The answer to that question is a resounding yes, no, maybe, and both.
There are pros and cons to using debit cards and credit cards, and times where one is clearly going to be the smarter choice over the other. In terms of debit cards, it’s far and away the best choice for getting a cash withdrawal. You simply go to an ATM and pull the cash out (and very oftentimes you will have to pay a fee for the service). When you use a credit card to get a cash advance, on the other hand, you will probably have to go to a bank to do it, and you will be charged very high interest on the amount you take out. Of course, if there is no money in your bank account then you won’t be able to get any cash, whereas if there is money left on your line of credit with your credit card then your lack of money problem is solved.
Another advantage to using your debit card over your credit card is that it forces you to live within your means. With a debit card you can only spend as much money as is in your bank account, so you can not get into debt with it. The opposite is true of a credit card, and many people are tempted into buying things they can’t afford, and soon end up with a mountain of high-interest debt.
A healthy financial picture should be everyone’s goal. To explore the pros and cons of debit cards and credit cards further read more Related Credit Articles on Go Banking Rates.