To know whether you should use a credit card versus a debit card, you need to consider your spending habits and understand the difference between a credit and debit card.
The Pros and Cons of each are below:
Interest free Does not Build your Credit
No Annual fees Possible Overdraft Fees
Can help with Budgeting Limited fraud protection
Convenient & Widely accepted Spending Limit depends on account balance
Short-Term Financing Option Danger of Overspending
Can build Credit History Interest Payments
May offer Cash Back rewards Late Payment Fee
Strong Fraud Protection Can Hurt Credit Score
Debit cards are ideal for everyday purchases. You can easily track spending. They are also a helpful way to build strong spending habits.
Credit cards can be helpful to build credit. If you trust yourself to spend wisely and consistently make on-time payments, they can be a great option.
Please reach out to us with any questions regarding a debit card versus a credit card.
Stephen Moss is a Registered Representative offering Securities through UNITED PLANNERS FINANCIAL SERVICES, Member FINRA/SIPC. Advisory Services are offered through Pegasus Financial Group. Pegasus Financial Group and United Planners are not affiliated. This is for educational purposes only.