Credit Card Quick

Credit vs. Debit: Which One Should you Use?

Introduction

The big debate continues: credit or debit?

Debit card advocates say that debit cards are the way to go because you can never spend more than you have, while credit card advocates tout the many safety benefits of using a credit card. So, which one is right?

To further confuse you, the truth is that both sides are right on the debit card vs. credit card debate. In other words, what may work well for one individual may not be such a great deal for another individual.

So, you’re at the checkout line at the grocery store, which one should you swipe? Here are some factors you may want to consider before deciding whether using a debit card or a credit card (or a combination of the two) is right for you:

• Credit cards allow you to pay for multiple purchases and then pay them off at once when the bill arrives, or in several increments, depending on your budget and financial situation.
• Because a debit card is tied to your bank account, you will not be approved for the purchase if you don’t have enough in your bank account to cover it. For some individuals, this is a good thing, while for other individuals this can prove to be quite embarrassing or inconvenient.
• If you’re not careful, credit card debt can wreck your finances and your credit score. On the other hand, the proper and responsible use of a credit card can boost your credit score and afford you lower interest rates on many types of loans and lines of credit.
• Large purchases are typically protected if you pay for them with a credit card. Some of the benefits of using a credit card for large purchases include warranty protection, theft protection and return protection.
• If you make travel reservations, hotel reservations or rental care reservations, you can expect the company to put a large hold on your account. This may not be a good time to use a debit card, as this could freeze a good deal of your money for a short period of time.
• For online purchases, credit cards are probably your best bet, as there are great protection laws placed on credit cards. In fact, according to the National Consumers League, credit cards offer stronger fraud protection and better security than debit cards.

The Top Five Tips for Protecting yourself from Credit Card Thieves

Identity Theft

There are many sneaky routes credit card thieves are taking to steal our credit card numbers and go on a shopping spree. However, there are just as many credit card thieves that are merely looking for a good opportunity. In other words, let your guard down and you can be sure that a credit card thief will be waiting to pounce.

The fact of the matter is that most credit card thefts are crimes of opportunity. This means that, as a consumer, you need to do what you can to not give a credit card thief the opportunity to take your credit card or personal information and run.

Here’s what you need to know:

1. When shopping online, stick to trusted sites. If you are unsure about the online company or if you simply don’t know anything about them, it is probably a wise idea to steer clear of purchasing from them.
2. Speaking of online shopping, make sure you check and double-check your antivirus and firewall software, as well as the site’s security certification. Remember: all of these things need to be in place in order to be fully protected from online thieves.
3. If you do a lot of online shopping, consider devoting just one credit card to your online purchases, thereby making it easier to track your purchases and prevent unauthorized charges from slipping past you.
4. Keep your credit card in sight, especially in unknown areas or at unfamiliar retailers. Many thieves will use small devices, called skimmers, to catch your credit card information after you hand over your credit card for a purchase. Beware of a retailer who walks away with your credit card to complete your transaction.
5. Don’t just skim over your credit card bills. Instead, take the time to thoroughly check all charges. Many credit card thieves charge multiple, inexpensive items in an effort to go unnoticed, so make sure even the smallest charges on your credit card are accounted for.

Credit Card Usage Declines for Online Shoppers

News

It appears as if credit card users are less likely to shop online with their credit cards than ever before.

Many individuals, as a result of the poor economy and mounting debt, have chosen to put away their credit cards and instead shop online using different payment methods.

In fact, according to a recent study by Javelin, entitled “Online Retail payments Forecast 2010-2014,” e-commerce grew nearly 11 percent in 2009, while credit card purchases fell below online payment services (such as PayPal and Google Checkout) and gift cards.

Online Shopping Increasing

According to American consumers, nearly 63 percent of us shop online, and this number is expected to increase to 78 percent by 2014. So, it only makes sense that credit card usage will also increase along with it. But, this doesn’t appear to be the case. The question is: why?

Many individuals, with the best of intentions, have decided to use other forms of payment when shopping online. For individuals who have difficulty managing their finances, this may be the best option. But for everyone else, using a credit card to make an online purchase is still often their best bet.

Credit Card vs. Debit Cards

Using a credit card for online shopping is a much safer alternative to using debit cards; for example, if a computer thief snatches an individual’s debit card numbers they could drain their bank account. A credit card, on the other hand, is protected from unauthorized spending. Keep in mind that even if your debit card is protected from credit card thieves, it can still wreak havoc on your life and your finances if your bank account is drained and checks begin bouncing.

Other individuals are simply moving away from credit cards altogether because of the state of the economy over the last year. Although, again, this may be a good idea in general, many consumers should consider the fact that credit cards can provide proof of payment and can often act as a receipt.

In other words, it may be best to keep at least one credit card for online purchases so that you can protect yourself and shop without worry.