Is credit card spending better than debit card spending?
According to figures released from the Halifax Group, UK consumers are all set to hit the sales, and nearly forty percent of us will be whipping out our credit cards in order to make purchases in the sales.
However, even more of us will be using our debit cards in order to purchase bargains during the January sales. The question is why do so many of us use our debt cards rather than a credit card to shop in the sales? And is there any added benefit to using a credit card over a debit card and vice versa?
 Well, many people may use their debit cards simply because they don’t have a credit card – perhaps because of their poor credit rating or the fact that they simply don’t want to get into credit card debt. Others may have maxed out their credit cards over the festive period and have no choice other than to use their debit cards to make purchases in the sales.
For those of us that have the choice of using either a debit or a credit card it is important to determine which will prove most effective, and this can vary based on individual circumstances. For instance, those with a rewards based credit card could really benefit from using their credit card rather than their debit card and then simply repaying the amount that they spend on their credit card in one go. This will enable them to accrue the rewards yet not be charged interest on the purchases that they make.
It is also important to check what sorts of benefits are offered on both your credit and debit card. Benefits can vary depending on your bank or card issuer, and includes areas such as extended warranty, fraud protection, etc. See what your cards offer, and this could help you to make a more informed decision with regards to which card to use for the sales.
Alisdair Milton
3rd January 2007
More Information:
- Credit Card Benefits
A credit card can be a highly effective and flexible financial tool for the smart shopper – and saver. It has many obvious advantages over cash and cheques – and a few hidden ones too!
- Cash Back Credit Card - General Guide
It seems almost too good to be true; a credit card company giving back money to the user just for spending it in the first place! However, as with all good deals, there are terms and conditions.
- Cash Back or Rewards
In the battle for new customers, credit card companies are offering to reward users for simply spending on their cards. The two most attractive systems seem to be cash back and rewards.
- Credit Card Charges
Credit cards appear to have only one cost to a user – the interest charged on purchases, but there are a whole raft of hidden charges just lurking below the surface. So, some cards offer an annual payment option in return for certain benefits. What is the best option, and in what circumstance
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