Since the inception of debit cards and credit cards, the popularity of plastic money and e-wallets have become among the top methods of payment for any kind of transaction. Cash money is hardly being used unless necessary. Given the traditional payment method of debit cards, credit cards are gradually taking its place as the primary form of payments.
The question of debit card or credit card has been over people’s minds since a very long time. Each of these cards has advantages over each other as well as its own share of disadvantages.
Choosing a credit card over a debit card
There are a number of instances where you can use your credit card over your debit card for various transactions depending upon the nature of it.
Ease of Payments
One of the first things most people do before or after getting paid is making budget for themselves considering the various kinds of expenses in the month. However, not always your monthly budget will be equal to your actual expenditure.
At this time, if there is an additional purchase to be made which is expensive, it is always better to buy it with your credit card. In this way, the total amount will not be deducted from your savings account at once. Along with this, you can plan the rest of the month better to pay off the total credit card bill at the end of the month.
Even though some debit cards also offer EMI methods of payment, credit cards are the better choice when it comes to purchasing expensive products through EMI. Almost all cards offer interest-free repayment if the right tenure is chosen when compared to debit cards.
If you have an emergency and require money on an immediate basis, a credit card comes more in handy than a debit card. If your savings account does not have the money you require, it becomes difficult during an emergency. Whereas, with a credit card, you can always use your credit limit assigned to the card if there is an urgent requirement and pay it back at the end of the month.
One major advantage of a credit card over debit cards is the rewards it offers in the form of cashback, discounts, etc. With every purchase you make, reward points are given to you. These points can be redeemed for the purchase of different products and can be redeemed in exchange of AirMiles.
Apart from AirMiles, credit card issuers partner up with several merchants to provide exclusive discounts and cashback offers on purchases made in-store or online.
These are some of the reasons why holding a credit card can be more beneficial when compared to a debit card. There are some people who may regard a credit card as a source for debt traps, however, that is completely dependent on how the card is used and on what kind of expenses. If you are a spendthrift, a credit card might not be the best option.
I am Naisha Patel, a professional finance writer specializing in personal finance. I have been working in the finance sector for a long time. All the people seeking financial guidance are in different stages of life. I love to explore every possible angle of personal finance and simplify things for the common people.