A few decades long discussion,over which type of card better fuelled by massive banks ads. For instance debit card better for your future financial wealth that credit card.
Debit card technically is digitized form of cash which you already earned. Credit card is line of credit which you have to repay to avoid personal financial crisis. Banks prefer active usage of credit cards because it generate more profit compare to debit cards usage.
Mostly credit card terms and conditions looks attractive until first credit card payments due acknowledged. Late fee charges, increased interest rate, carrying balance to next payment cycle, negatively impacted credit score, frequent notifications, risk of loan trap….It’s Long list of troubles.. Customers read very rarely “Terms and conditions” rarely read in full agreement and don’t understand consequences. To make consequences less horrifying, plenty of benefits advertised but applied only if payments done on time.
Debit cards gives freedom from loans and ensures strict budget flow. You can not spend more than you have on bank account. This prevents from spontaneous and emotional purchase. Especially females are most prone for emotional, useless purchases.
In next article I’ll write about detailed ways how banks make money on your credit card usage.
Please follow and comment.
Thank you for your time.
One thought on “Debit vs credit card basics”
[…] Credit and debit cards look similar but influence differently on wealth utilisation https://my-financial-wealth.com/2019/01/11/debit-vs-credit-card-basics/ […]