When Credit Cards are Better Than Debit Cards

When Credit Cards are Better Than Debit Cards

When Credit Cards are Better Than Debit Cards‘ tries to show you how credit cards are superior when compared to debt cards pertaining to certain specific purchases. Debt cards are best suited when you have to limit your purchases to the amount of money that is available at your disposal. Also, if you have to withdraw money from an ATM, you should stick to debt cards. Last but not the least, with a debit card, you can never incur a debt. But debt cards have certain limitations pertaining to liability and security.

When Credit Cards are Better Than Debit Cards

This raises an important question: If debit cards cannot lend themselves in certain situations, can we use credit cards?

The answer is yes and no both. In this article, I am going to address the ‘yes‘ part of the answer. So here are 6 kinds of purchases that you have to do with a credit card instead of a debt card:

1. Consider payment via credit card when renting a car

Most of the credit cards come with a rental car insurance. This will protect you from a liability if you cause an accident with a rented card. Debit card do not carry such a perk and you need to buy an insurance separately.

2. Consider payment via credit card when renting a hotel room

If you rent a hotel room with a debt card, you need to keep a deposit to cover costs like room service and damages. But no such deposit is required when you intend to pay with a credit card. Only a temporary authorization is placed on your credit card account. With a debit card, there is a good possibility of your available funds being frozen.

3. Opportunity to earn rewards and loyalty points

Most of the credit cards offer enticing rewards and loyalty points on purchases, which are absent in debit cards. If you are a kind of a person who pays your credit card bill in full every month, then credit cards best suit you. You not only incur 0 interest but also accumulate points and rewards which you can redeem whenever you want.

4. No charge-backs on debit cards

Credit cards lend themselves supremely when you are not happy with the purchases that you have made online. If the product that you purchased online do not meet your expectations or is damaged, you can always request a charge-back. But in case of debit cards, the amount of purchase is immediately debited to your account and to get a refund is a long uphill battle with the merchant.

5. Credit cards come with extended warranty

If you need extended warranty on electronic products, then you need to pay an additional amount. But many credit cards offer extened warranty benefits. You will not find such benefits in debit cards.

6. When you buy air tickets

Most of the credit card companies tailor credit cards that cater to specific requirement of consumers. Travel credit cards offer free air miles, discounts on tickets, trip cancellation, insurance on lost or damaged luggage and such. Debit cards do not offer such benefits.

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