I don’t know about you, but I am often in a shopping dilemma—do I use my credit card to buy this, or do I use my debit card? Do I want to pay for this over time (plus interest), or do I have the money in my checking account to cover the cost of what I am buying? Both cards are such an easy, convenient way to shop without having to carry any cash. So I try and keep these simple points in mind:
- Use my credit card—essentially I am borrowing money I have to pay back!
- Use my debit card—the funds come right out of my checking account, so do I have the money in
my checking account to cover this purchase?
I find that I do need to use both cards—each has a benefit for me:
- Credit card—when I use within my spending limit and pay on time, it helps me build a solid credit rating. So very important!!
- Debit card—since I know I have a limited amount in my checking account, it helps me stick to my monthly budget. It is so nice not to have monthly credit card bills in my mailbox!!
Compare the two payment types for yourself:
CARD / CHECK CARD
|You get a bill at the end
of the month for the
money you owe.
|Money is deducted
immediately from your checking
|Enables you to buy things
today instead of
waiting and saving. But remember: You’ll have to pay the money back
|You can only buy what you
can afford with the
cash in your checking account, so you may have to wait and save to make
|If you consistently pay
your bills on time and
in full each month, you’ll build a good credit history and good credit
|If you don’t overdraw,
you’ll strengthen your
reputation with the bank as a good customer.