Credit, Debit, or Cash – The Best Way to Pay
Have you ever wondered, should I pay for this with my credit card, debit card, or with cash? I know I sure have. Like just about everything else in life, there are pros and cons in choosing what form of payment to render when purchasing goods and services. Here is some sound advice that may prove beneficial:
Use Your Credit Card
Your credit card should be used for large purchases, especially if you are in the good habit of paying your credit card debt in full every month. Credit cards offer the greatest protection of all the payment choices. The typical credit card will limit your liability on fraudulent and unauthorized purchases. And in many cases, most issuers will not hold you liable for anything.
The other huge advantage that credit cards have over debit cards and cash is purchase protection. If you should have a legitimate grievance with a merchant that you have made a credit card payment to, your credit card company will intercede on your behalf while the dispute is adjudicated. If the credit card issuer rules that you are in fact correct, you will not be held liable for those charges.
Use Your Debit Card
Some people don’t want to owe anybody anything, least of all credit card companies. And you will never be charged interest when using a debit card because it is your money. Debit cards are linked directly to your checking account and that is where the money comes from. When using a debit card be sure to carefully track your purchases. Overdrafts, or exceeding your available limit, will result in hefty penalty charges that range between $30 – $40.
As far as liability for unauthorized activity goes, you do have some protection, but no where near the kind of protection that a credit card provides. You have to be on your toes with a debit card. If you discover fraudulent activity within the first two business days you can limit your liability to $50. After the two business day period lapses the liability leaps to $500. And after 60 days you are out of luck. And as far as purchase protection goes, well, there isn’t any.
Use Cash
Cash is king! You can’t beat the good old fashioned greenback. The only real danger with cash is losing it. You don’t have to worry about identity theft, and cash is accepted everywhere. The downside is that you will have no record of your purchases, unless you get a receipt, and you will not have the option to dispute charges as you would with credit cards.
Related Information:
- Debit Cards May Be Next on the Reform Agenda See what Congress has in mind for reforming the way debit cards are handled by the issuers....
- The Pros and Cons of Using Debit Cards Find out what the advantages and disadvantages of using debit cards are in this informational piece....
- Stores Report Shoppers Preference for Cash and Debit Cards More and more shoppers are now turning to cash and debit cards as opposed to using credit cards....
- Important Facts About Debit Cards Find out what a lot of people don't know about debit cards....