Simpler Smarter Savings

In today’s world, credit cards are often to blame when consumers spend too much money on unnecessary expenses. Therefore, to stop such wasteful spending habits; simply stop using credit cards. This is easier to say than it is to do. People are used to how easy credit card processing is and often swipe for the sake of convenience. Some of these same people feel that carrying cash around is too troublesome.

What is the alternative? A great gift to consumers is the debit card. A debit card is made out of plastic, just like a credit card. However, what you spend is immediately taken out of your bank account. Therefore, you can never spend more than what is in your bank account. This is very unlike spending on a credit card where you are actually borrowing an amount first and paying it back later. A debit card forces some people to live within their own means.

Debit cards are often called electronic checks. These are used often for Internet purchases and don’t have a physical plastic card, just numbers. You can think of a debit card as being much like a portable automatic teller machine. Most all merchant accounts accept both debit and credit cards.

There are a couple of major differences between credit and debit cards.

• If you settle a credit card bill in full each month, and if you are never late on your payments, your credit card merchant accounts will normally give you free use of their money owed until it’s time to pay the bill. However, with a debit card, your money is immediately deducted from your bank account.

• One advantage of using a credit card is that it is much easier to dispute a charge. This is especially important for problematic goods or merchandise. Most all banks allow you to dispute a charge for up to two months after the purchase. Then, they credit that amount to your account once the issue is resolved. When you use a debit card, the time frame is much shorter, which is typically less than a week.

When you wonder which card you should use, most experts agree that you should always use your debit card for the things you would have used cash for such as buying groceries. Always remember that when you use your debit card, the funds will come out of your account immediately for the purchase; therefore, make sure you have the funds in your account to pay for the purchase. Credit card processing and debit card transactions are both considered fast, safe and easy.