Credit vs. Debit Cards – what’s the difference?

On this occasion, we think we can lend you a hand, making you think about the key points that you should reflect on before requesting one or the other.

Responsible person with your financial situation

Responsible person with your financial situation

The first and most important thing is to criticize yourself and think about whether you are a responsible person with your financial situation. Having a credit card means being very aware of your finances and being much more responsible. Think that the moment you contract a credit card with your entity, you assume a debt and that you must have enough financial lung to satisfy it at the time of settlement. If you are a less organized and more clueless profile, our recommendation is that you opt for debit cards; fewer scares, fewer surprises, only allowing you to use the money you have.

The money you spend be discounted with each purchase

The money you spend be discounted with each purchase

The second point to keep in mind is if you prefer that the money you spend be discounted with each purchase or if, on the contrary, your choice is the end of the month. You may not want to finance your purchases and bear the burden of associated taxes, but on the contrary, you would prefer a single settlement at the end of the month of all expenses to have a complete view of what you have spent that month and be able to so plan better. In this case, opt for a credit card but with full payment at the end of the month.

Keep an eye out! Make sure you have liquidity in the current account associated with the card at the time the receipt is going to be passed or you will be overdrawn. Depending on each bank, being in the red can cause additional costs. In the event that you prefer that the money be discounted at the exact moment in which you make the purchase, your option is the debit card. You will see your available balance decrease with each use, allowing you to have a real view of the money available.

Do you have other debts?

Do you have other debts?

Next point; Ask yourself if your current situation allows you to take on debts. There are several points that you have to keep in mind and that will help you answer this question in an objective and responsible way. Do you have other debts? Do you have enough income? What regular expenses do you have? Do you usually have unexpected commitments? Do you sometimes find it difficult to make ends meet? If after answering these questions you feel that your situation is not as stable as you would like, opt for a debit card to avoid the temptation, thus assuming more debt. If, on the other hand, your accounts are healthy and you enjoy a stable and secure situation, you will have no problem assuming a payment at the end of the month, or a deferred payment to finance your purchases.

Intend to postpone the payment of your purchases

Intend to postpone the payment of your purchases

The last point that we consider you should take into account when choosing is if you intend to postpone the payment of your purchases. If you are clear that the answer is yes, you have no other viable option than to proceed with the hiring of a credit card, since they are the only ones that allow you the deferred payment method. The only thing that you have to be clear about is that the installment payments will entail the payment of certain fixed interest.

Since financial institutions obtain profitability when clients opt for a credit card with a deferred payment, they often share these benefits in the form of advantages for clients. It is usual that with the contracting of this type of plastics, you have discounts, free insurance, access, event tickets and a long etcetera depending on the entity with which you are going to contract it. If you still have doubts about what some of the cards may offer you, go to our cards and loans section.

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