Which Do You Think is Better? Debit or Credit?

[purplecat41877]

I use both debit and credit cards but I believe that debit is better. The reason for that is because with a debit card, I'm spending money I actually have on hand. To me, using credit is like borrowing money. Eventually, the money has to be paid back.

[Fryk]

I complpetely agree. Maybe in the case of an emergency credit cards have their use. But I have seen too many people, like my parents and my wife, get into trouble by using credit cards.

[Greenday]

What the hell is a credit card? I don't have one. (Ok, I'm 21 so I don't exactly need one)

But yea, I prefer my debit card. I can't spend money I don't have.

[BroomJockey]

Debit cards in Canada cannot be used to order anything online. Why? No expiry dates on ones from major banks. So since I'm now doing a large amount of shopping from Amazon (.com AND .ca, don't ask), ordering comics from online cartoonists (Girls With Slingshots, Real Life [if he ever actually finishes it], check them out!), and purchase games through Steam, I need a credit card. Further, a lot of delivery places charge a surcharge if you pay with debit using their mobile machines, but not with credit cards.

So all in all, I like my credit card, and I'll use it, and then pay it off the same day via my online banking. Oh, and to show me the love, they keep upping my credit limit, even though I never come close to maxing it. I figure it's insurance in case something happens to me.

[HYHYBT]

Theoretically, the best is to use a credit card, but not charge more than you have in the bank to pay it. If there's some kind of screwup with a transaction, the bank will fix it either way... but if it's a debit card, you have no access to your money in the meantime. The same with anything that puts a temporary hold against your account, like a hotel room. Some years ago I ordered a new laptop online, with a spare battery. When I placed the order, they set aside a chunk of my credit limit. But since the battery was out of stock, the actual charge was a different amount... leaving my available credit reduced by nearly double what it should have been for a week or so. No big deal on a credit card; I wouldn't even have noticed if I hadn't happened to check. But had it been debit, and ignoring the daily limit on a debit card, I'd have been "overdrawn", or at the least have been unable to pay *anything else at all* until it cleared itself.

That daily limit is another good reason to at least have something else available. If I remember rightly, the limit is $300 or so. Which is more than I *have* at the moment, but if I did have the money for, say, a nice HDTV I wouldn't be able to buy it on my debit card. There's also the issue of overdraft protection: if you only have a few transactions on your bank account each month, it's easy to keep it straight, but if you use debit for everything it's more difficult not to either forget one or miscalculate, and even a few cents below 0 starts generating fines. Whereas if you're paying your cc off regularly it's not likely you'll ever get anywhere near the limit.

This is, of course, assuming that you have the self-control not to use the credit card beyond what you can pay off right away, or for an emergency. Otherwise, stick with debit.

[Boozy]

Theoretically, the best is to use a credit card, but not charge more than you have in the bank to pay it.

Right on.

I pay for everything with a credit card, for several reasons:

1. Rewards Points. Whether you collect air miles or are on some other points system, credit cards pay off. My bank gives me points when I use my debit card, but they give me double points when I use my credit card. In one year, my points usually add up to about $500 worth -- and it costs me nothing.

2. Banks often charge for debit use, but credit cards never charge. Debit cards are usually subject to a per-use fees, or fall under a monthly banking plan fee. My credit card is free to use.

3. Consumer protection. If I get into a dispute with a store over a purchase, and they refuse to accept the return, I can dispute the charge with my credit card company.

4. Free credit should almost always be taken advantage of -- why not let your money accrue interest in a high-yield account during the grace period credit cards allow?

I get the bill once a month, and I know exactly what the balance will be. The cash is already waiting in my account (having been collecting interest this entire time). I transfer the balance via online banking, and I'm finished.

Frankly, credit cards are a far better cash-free option for anyone with enough discipline to budget their money. I'm always amazed at the number of grown adults who say, "Oh, I never use a credit card. That's an easy way to get into debt." How someone could be years (and sometimes decades) into adulthood and be unable to restrain themselves enough to use a credit card responsibly is beyond me.

[purplecat41877]

Banks often charge for debit use, but credit cards never charge.

That would depend on your bank. I haven't been getting charged extra for using my debit card but if I went to an ATM that wasn't part of my bank, I would get charged. That's the reason I go to an ATM that's part of my bank. Sometimes, I use my debit at my job when buying stuff if I want cash bank and I haven't gotten charged extra once.

[AFPheonix]

Also take into account that you may be in an area that doesn't recognize your debit card, like, say, another country. I couldn't run debit in Alberta, although I could run credit.
Honestly, if you're smart about it, you can build up your credit score that that helps you in many more ways as well, from getting financing on cars to getting lower rent for housing.

[Rapscallion]

Hang on - lower rent for housing from a better credit rating? Never heard of such a thing - mustn't be something we do over here, I guess.

Trying to work out the logic for that one.

Rapscallion

[joe hx]

Right now almost everyone checks your credit in the USA. Your car insurance premium could go up because of bad credit, you might not get hired somewhere because of bad credit, you might not get an apartment or rent might be higher because of bad credit. There's probably plenty more examples.

[DesignFox]

Raps, you can come out and say it. We're just fucked up on this side of the ocean.

[BroomJockey]

Raps, you can come out and say it. We're just fucked up on this side of the ocean.

Oi! You keep your fucked-upness south of the 49th, missy!

I had my credit checked to get my apartment, but that was probably just because I was a 25 year old moving in, alone, without a co-signer. Don't really blame them. Don't think anyone else has checked it, though.

[DesignFox]

Apologies to Canada...They are less fucked up than those of us downstairs. At least, in some ways.

[BroomJockey]

Apologies to Canada...They are less fucked up than those of us downstairs. At least, in some ways.

Apology accepted. And yes, we've our own unique ways of being fucked up.

Poutine, politicians choking protestors (I love that fact), there's a nice long list. But it's OUR list dammit!

[smileyeagle1021]

Frankly, credit cards are a far better cash-free option for anyone with enough discipline to budget their money. I'm always amazed at the number of grown adults who say, "Oh, I never use a credit card. That's an easy way to get into debt." How someone could be years (and sometimes decades) into adulthood and be unable to restrain themselves enough to use a credit card responsibly is beyond me.

you said pretty much everything I wanted to say and I have to agree 100% with your last point. I've been mostly cash free (though I'm starting to move over to cash again now that there is a Winco in Salt Lake... I love Winco, best grocery store on the planet... sadly they are cash or debit only and it's impossible to overdraft on a cash payment, so I stick to the safety of cash).
Oh, those of y'all who keep saying debit cards are better because they won't let you spend money you don't have... clearly y'alls haven't heard of NSF overdraft fees... banks are more than happy to approve the transaction then charge you anywhere from $25 to $50+ for the convenience of having the transaction approved despite not having the money.