Banking on Credit Cards: Why Bank Credit Cards are Better than Debit Cards
They’re one of the biggest expenses in your budget, and they’re not going away anytime soon. Therefore, it’s important to choose wisely when it comes to your bank credit cards or debit cards.
In this article, we’ll break down the pros and cons of credit cards vs debit cards so you can find out which one will work best for you and your financial situation!
Your Credit Card May be Your Best Money Management Tool
It’s important to know the difference between bank credit cards and debit cards. Both can be used for shopping and both have their pros and cons. But when it comes to money management, credit cards are better than debit cards.
Unlike a debit card, you don’t need to worry about checking your balance before making a purchase with a credit card. And with an interest-free introductory period of as long as 24 months, you’re not charged interest until after the promotional period ends.
Furthermore, if you use your credit card responsibly by paying off your balance each month and keeping spending within your limit (and you should!), then you will save money in other ways. You won’t need to pay overdraft fees or surcharges when using a cash machine or traveling abroad because you’ll only spend what is in your account – not more!
Banks Offer Perks You Can’t Get With Debit Cards
Most people use debit cards for the same reasons they use credit cards: to make purchases and get cash back or rewards. But did you know that banks offer credit cards with perks that you can’t get with debit cards? Here are a few reasons why bank credit cards are better than debit cards:
- With a credit card, you can get rewards like cash back or points that can be used for travel.
- Credit cards often have sign-up bonuses, which can give you a nice chunk of change if you meet the spending requirements.
- You can also take advantage of 0% APR periods, which can help you save money on interest if you need to carry a balance for a few months.
Bank Rewards Programs Are Even Better Than Retail Store Rewards Programs
It’s no secret that credit cards offer rewards for spending. But what you may not know is that bank credit cards typically offer better rewards than retail store credit cards.
That’s because bank rewards programs are designed to encourage customers to use their credit card for all of their purchases, both big and small. And the more you use your credit card, the more points or cash back you’ll earn.
What to Look for in a Wallet-Friendly Reward Program?
When you’re looking for a credit card, the interest rate is important, but so is the rewards program. You want a card that gives you points for every dollar you spend, and that doesn’t have an annual fee.
Look for a program that offers bonuses for signing up and spending in certain categories. And make sure the card is accepted everywhere you want to use it.
Keep Track of What You Need to Do to Meet Rewards Goals
high interest rates make it difficult to pay off your debt if you only make minimum payments. The more debt you have, the higher your minimum payments will be, and the longer it will take to pay off your debt.
When you have a lot of debt, it can be difficult to keep up with your payments, and you may end up missing payments or being late on payments.
This can damage your credit score, which can make it difficult to get a loan or credit card with a lower interest rate in the future. It can also make it difficult to rent an apartment or buy a car.
If you’re struggling to pay off your debt, there are some things you can do to help manage your debt and make it more manageable.
How High Interest Rates Affect Carrying Debt?
Carrying debt can be expensive, especially if you have a high interest rate. When you carry a balance on your credit card, you’re essentially paying interest on that debt.
The higher your interest rate, the more money you’ll end up paying in the long run. That’s why it’s important to understand how high interest rates can affect your ability to pay off debt.
Use Reward Points Wisely
It’s important to be strategic when using credit cards with rewards programs. The key is to use the card for everyday purchases, but also to pay off the balance in full each month. This way, you’ll rack up points quickly without accruing any interest charges.
And be sure to redeem your points for something that will really add value to your life – like a free flight or a nice dinner out. With a little planning, you can make the most of your credit card rewards and enjoy some great perks!
Avoid Bogus Fees and Surprises
When you use a debit card, you’re usually getting hit with all sorts of fees—monthly maintenance fees, ATM fees, foreign transaction fees, and more.
And if your card is lost or stolen, you could be on the hook for thousands of dollars in unauthorized charges. Credit cards from banks tend to have fewer fees and offer more protections if your card is lost or stolen. So why not bank on a credit card?
Some Things Are Not Worth the Reward Points
One of the most popular questions I get asked is whether or not credit cards are worth it. The answer, like most things in life, is that it depends. If you’re the type of person who pays their balance in full every month, then you can probably benefit from using a credit card.
However, if you’re someone who tends to carry a balance from month-to-month, then you might want to reconsider using a credit card. The reason for this is that credit cards typically have higher interest rates than other types of loans, which means you’ll end up paying more in the long run if you carry a balance.
Additionally, many credit cards come with annual fees, so you’ll need to weigh the cost of the fee against the benefits of using the card.
In general, bank credit cards are a better choice than debit cards. They offer more protections and perks, and can help you build credit.
However, there are some exceptions. If you tend to carry a balance or finance large purchases, you may be better off with a debit card that offers lower interest rates. Ultimately, the best choice for you depends on your spending habits and financial goals.