Spend wisely using your credit card or debit card

Cashless shopping makes life more convenient and safe, thanks to debit cards and credit cards. With online shopping becoming a norm, debit card and credit card are the popular choices to use for payments. If you have both payment cards, have you ever wondered which one is the smarter choice to use?

Firstly, what’s the difference?

A credit card lets you borrow money based on your credit limitfrom the card issuer. Using a credit card lets you pay in installment and can give you rewards, deals, or discounts depending on the partner merchant. On the other hand, a debit card simply deducts money directly from your bank account after your transaction. You can continue to charge your transactions to your debit card, as long as it has enough funds on your bank account.

When to Use Credit Card 

Shopping Online from Major Retail Store. A credit card is much safer to use than a debit card when shopping online. This is because a credit card offers more protection when your card used fraudulently. In case of fraud, you must notify your credit card issuer and not pay for the fraudulent transaction until the credit card company resolves the matter.  

Travel-related purchases. Using your credit card for your travels can help you manage your finances – it will not wipe out all your savings immediately. 

Buying big-ticket items in Installment. If you’re buying big-ticket items such as appliances, gadgets, or furniture, a credit card is an ideal way to pay for such purchases. The0% installment feature of credit cards will make it easier for youto manage monthly payments.

Paying for recurring bills. With the auto-debit feature of credit cards,you won’t miss out on paying your utility bills anymore. Simply enroll your credit card in this feature for hassle-free payment.

For rewards and rebates. One good thing about using a credit card is thatyou get to enjoy the rewards points, perks, and cashback it offers. Make sure you use your credit card for purchases that will qualify you for these perks.

When to Use Debit Card 

For everyday purchases. A debit card is safer to use for every day & small purchases. As the funds are directly drawn from your bank account,you can easily stick to a budgetand help you minimize daily spending.

Withdrawing Cash.Withdrawing money from ATM using your debit card is a lot cheaper – it’s free of charge when you withdraw from your issuing bank. Unlike withdrawing cash using a credit card, you will be charged with cash advance fees which are higher than regular interest rates.

Final Thoughts

Having both payment cards is a convenient way to pay for purchases and avoid carrying too much cash in your wallet. Aside from convenience, it can help you manage your financial well-being if all purchases are well-thought. 

In the case of credit cards, you can avoid careless spending if you always keep in mind your ability to pay back on the set due date; and in the case of a debit cards, you can avoid overspending by keeping a tab of available funds in your bank account.

So what’s the smarter choice? Plan your purchases well so you can use the payment card that is suitable for the occasion.