Other than very low annual subscription fees for debit cards, the below article clears up which card is better for you.
Debit Card Versus Credit Card: Which Is Right For You?
June 13, 2012
Written by Ching
Do you know the differences between a debit card and a credit card?
There are many, but the main distinction is whether you “pay now” (debit) or you “pay later” (credit).
Here’s how each card works.
Debit card
It is linked to your savings or current account, and most of the ATM cards today also double as a debit card. Though you won’t fall into debt with a debit card, there are still various implications to using one.
In a nutshell, a debit card:
does not have a credit limit,
takes funds directly from the bank account whenever the card is used to make payment, and
does not allow payments exceeding the balance in the bank account.
Credit card
It is a commonly used payment method by most working adult. It allows its users to make payments through credit with the bank.
If not used wisely, it can lead to various money mismanagement problems and debts. A credit card:
has a credit limit,
allows its users to borrow money from the bank to make purchases,
has an interest-free period of around 20 to 45 days for its users to clear their debt, and
charges an interest for any outstanding balance after the said period.
Unless you are a careful, diligent spender, these cards can be very expensive with interest charges and fees.
On the other hand, because of the instant access to your bank account, fraud prevention is perhaps more important when you own a debit card. If it falls into the wrong hands, your bank account is at risk and could potentially be emptied.
https://www.imoney.my/articles/debit-card-vs-credit-card
Debit Card vs Credit Card – Part 2
July 11, 2012
Written by Ching
In Part 1, we explained how debit cards and credit cards work, as well as some of the differences between the two.
Now let’s delve in and look at some of the advantages and disadvantages of debit card vs credit card.
Advantages of debit card
• Since money is directly deducted from your savings account, there will never be any trouble with debt! Debit cards are perfect for those who always find themselves constantly in debt as you can only spend money that you have.
• It is easy to apply for a debit card. It usually only requires that you have a savings or current account with the bank. No credit checks!
Disadvantages of debit card
• While it is hard to overspend since actual money from your bank account is being used each time you swipe your card, there can be times when you might overdraw your account. This might lead to the bank charging an overdraft fee.
• Unlike credit cards, debit cards seldom have rewards programs and services.
And now we move on to credit cards.
Advantages of credit card
• Credit cards allow you to use money that you don’t have…YET. In other words, you can make purchases anytime, anywhere, as long as it is within your credit limit.
• Credit cards can improve your credit score. Punctual payment of your credit card bills can improve your credit score, which in turn allows you to obtain better rates for other loans.
Disadvantages of credit card
• Interest charges. Using a credit card is like using borrowed money and when you use borrowed money, interest charges will apply. If you don’t pay your bills on time, you might end up paying more than you think for your purchases.
• You are using money that isn’t yours. If you don’t have enough money to pay off your credit card debt at the end of the month, there is a risk that you will start building a huge pile of debt, and end up in a bad financial situation.
https://www.imoney.my/articles/debit-card-vs-credit-card-2
Debit Card Versus Credit Card: Which Is Right For You?
June 13, 2012
Written by Ching
Do you know the differences between a debit card and a credit card?
There are many, but the main distinction is whether you “pay now” (debit) or you “pay later” (credit).
Here’s how each card works.
Debit card
It is linked to your savings or current account, and most of the ATM cards today also double as a debit card. Though you won’t fall into debt with a debit card, there are still various implications to using one.
In a nutshell, a debit card:
does not have a credit limit,
takes funds directly from the bank account whenever the card is used to make payment, and
does not allow payments exceeding the balance in the bank account.
Credit card
It is a commonly used payment method by most working adult. It allows its users to make payments through credit with the bank.
If not used wisely, it can lead to various money mismanagement problems and debts. A credit card:
has a credit limit,
allows its users to borrow money from the bank to make purchases,
has an interest-free period of around 20 to 45 days for its users to clear their debt, and
charges an interest for any outstanding balance after the said period.
Unless you are a careful, diligent spender, these cards can be very expensive with interest charges and fees.
On the other hand, because of the instant access to your bank account, fraud prevention is perhaps more important when you own a debit card. If it falls into the wrong hands, your bank account is at risk and could potentially be emptied.
https://www.imoney.my/articles/debit-card-vs-credit-card
Debit Card vs Credit Card – Part 2
July 11, 2012
Written by Ching
In Part 1, we explained how debit cards and credit cards work, as well as some of the differences between the two.
Now let’s delve in and look at some of the advantages and disadvantages of debit card vs credit card.
Advantages of debit card
• Since money is directly deducted from your savings account, there will never be any trouble with debt! Debit cards are perfect for those who always find themselves constantly in debt as you can only spend money that you have.
• It is easy to apply for a debit card. It usually only requires that you have a savings or current account with the bank. No credit checks!
Disadvantages of debit card
• While it is hard to overspend since actual money from your bank account is being used each time you swipe your card, there can be times when you might overdraw your account. This might lead to the bank charging an overdraft fee.
• Unlike credit cards, debit cards seldom have rewards programs and services.
And now we move on to credit cards.
Advantages of credit card
• Credit cards allow you to use money that you don’t have…YET. In other words, you can make purchases anytime, anywhere, as long as it is within your credit limit.
• Credit cards can improve your credit score. Punctual payment of your credit card bills can improve your credit score, which in turn allows you to obtain better rates for other loans.
Disadvantages of credit card
• Interest charges. Using a credit card is like using borrowed money and when you use borrowed money, interest charges will apply. If you don’t pay your bills on time, you might end up paying more than you think for your purchases.
• You are using money that isn’t yours. If you don’t have enough money to pay off your credit card debt at the end of the month, there is a risk that you will start building a huge pile of debt, and end up in a bad financial situation.
https://www.imoney.my/articles/debit-card-vs-credit-card-2
