Aren’t credit cards and debit cards the same?

They act the same when you use them with subtle differences behind the scene.

You will find that sometimes a credit card is better than a debit card.

For example, if you desire to rent a car a credit card is a better bet.

Here is why, when a car rental company swipes your card they block out a certain amount say $500. If you use a debit card and you have $600 in the bank you now only have access to $100 because of the hold on your account. The same thing happens when you rent a hotel room or even get gas at the local gas station.

Credit cards also give you better protection if you purchase a defective product or need to dispute with a vendor. The credit card company will investigate a dispute with the company you purchased the product or service. They will put a hold on that money so you don’t have to pay that portion of the bill until it is resolved. You will not have to pay interest on that money while the dispute is ongoing.

Credit card companies sometimes give you an extended warranty on a product you purchase.

Debit cards are good for those every day purchases like groceries, restaurants, routine expenses or any place you would normally write a check. You are spending money that is in your .

Many people get into trouble with credit cards and end up ruining their credit because they fail to realize that they are spending next month’s paycheck to pay the charges accrued on the credit card unless they have the money in savings to pay off the charges. It makes it seem like you have more money to spend until the bill comes due. If you use a credit card it is always good idea to keep the balance low and pay it off every month so you don’t have to pay interest on the use of the money.

It is also a good idea to keep a small credit limit on the card so you are not tempted to spend more than you could pay back. This would lead to a monthly bill that you would have to pay every month.

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