More and more people are beginning to use their debit cards more than their credit cards. With credit card companies socking it to consumers at the last minute before the new CARD Act goes into action in February 2010. I read a recent article today on CNNMoney.com about the downside of debit cards. This is what they had to say:
1. Security
If your credit card is stolen you are not responsible for unauthorized charges over $50. But when your debit card is stolen you have to report any charges you didn't make within in two days to get the same protection. Curtis Arnold of cardratings.com says card issuers have different policies so make sure you read the fine print.
2. Your Credit Score
If you trying to build your credit score, your debit card won't help. Debit cards have absolutely no impact on your score. Since debit cards pull directly from your checking account there is no credit.
3. Debit don'ts
If you are going to purchase a big ticket item use your credit card rather than your debit card. Credit cards offer better protection.
But let's look at the pro's when getting out of debt.
1. Convenience
Having a debit card is a lot easier than carrying a wad of cash or running to the ATM.
2. No qualifications
Since debit cards are not credit scrore driven you don't have to have a great score to qualify for one.
3. Keeps you from spending money you don't have.
Using your debit card keeps from adding to you credit card balances. When you use your credit card you tend to forget what you spend until you get your statement. With your debit card you can only spend what's in your checking account.
So if you are trying to pay off your credit cards and haven't switched to your debit card it's time to start.
Let's hear from you. Do you use your credit card more and your credit card less?
No comments:
Post a Comment