Why is Credit Card better than a Debit Card?
There are a few reasons why credit cards may be a better choice than debit cards in certain situations:
- Credit cards offer more protection against fraud. Suppose your credit card information is stolen and used to make unauthorized purchases. In that case, you can dispute the charges with your credit card issuer, and you will not be held liable for the fraudulent charges. Debit cards do not offer the same level of protection, and if your debit card information is compromised, the thief can drain your bank account.
- Credit cards can help you build credit. Using a credit card responsibly by paying your bills on time and keeping your balance low can help you build a positive credit history, which can be beneficial when you need to borrow money in the future. Debit cards do not have this benefit, as they do not involve borrowing money.
- Credit cards offer rewards and benefits. Many credit cards offer rewards programs for every purchase you make, such as cashback, points, or miles. Credit cards offer additional benefits, such as extended purchase warranties or concierge services. Debit cards generally do not offer these types of rewards or benefits.
- Credit cards can be useful in emergencies. If you don’t have enough cash to cover an unexpected expense, a credit card can be a valuable tool to help you pay for it. Debit cards may not be an option if you do not have sufficient funds in your bank account.
- Credit cards can provide a grace period. If you pay your credit card balance in full each month, you can take advantage of a grace period, which allows you to avoid paying interest on your purchases. Debit cards do not offer a grace period, and any charges you make will be taken directly from your bank account.
Featured Image Credit: BankBaazar
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