Monday, December 12, 2011

Whats the diffrence between Credit and Debit in terms of using a bank card?

I asked my mom and like other questions she doesn't answer them thourly (spelling?) She said there's no big diffrence but I know that theres a huge diffrence because you may have to pay interest when borowing money from the bank (credit) and with debit its coming straight out the bank, so in your guys opinion which is also better, credit or debit?|||When you use a credit card, you are taking a loan, and interest charges start to build up at the end of the month unless you pay it off in full (which is what you should do).



When you use a debit card, you are basically writing a check--the money is immediately taken from your account and given to the merchant.



Both have their uses. If you, for instance, need to buy a new washing machine but don't immediately have the cash, it can be useful to spread the payments out over a few months, accepting that you will be paying interest. But it's very easy to get into debt trouble that way if you charge more than you can reasonably pay off in the near future.



Most people carry both these days.



Debit cards are safer, since you are only spending money you already have on deposit. But they lack the flexibility that a credit card has.|||To actually answer your question: a checking account debit card with a Visa or MasterCard logo has the same effect whether you choose "debit" or "credit" at the checkout counter. Both take money directly from your checking account, and no borrowing occurs.





They do have differences, though. A "debit" purchase is authorized by using your PIN. A "credit" purchase is authorized with your signature. And the store pays a higher fee to accept credit cards.





If a card offers rewards and bonus features like purchase protection, you'll usually have to choose "credit" to be eligible. So using the "credit" option has a slight edge, as long as you realize it still works just like writing a check and you need to have the money in your account.|||Bank debit card and credit cards are two different things.


Don't confuse them.


A bank debit card you can use as credit or debit which tends to confuse people, but it comes out of the checking account right away.





A credit card.


You make charges all month long, and you get a bill after one month.


If you pay the balance in full, you never pay interest and develop great credit


54% of Americans never pay interest on credit cards by paying in full.


Don't think just because people are using credit cards - that they are paying interest|||Adding to huntsman, it depends on your money habits. When you have a debit card they dont allow you to overspend if you have a credit card you might accidentally over indulge and then if you cant pay it off at the end of the month your interest rates might go up and your credit score down. It all depends on your money habits

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