It is important to know the advantages and disadvantages of owning credit cards. You must be aware of the plus points but knowing the disadvantages can allow you to prevent costly mistakes. If they let you buy anything you want they can also tempt you to pave your path towards destruction too.
What a Credit Card Does. The holder of the card may avail it only till a certain limitation. A credit card allows the holder to pay for the goods and services they want to avail but only within the limit of the card. For instance, if the card holder has a limit of US $2000, the owner cannot exceed this limit; if they do, they can pay the payment in cash which is due.
For example, let's say you are the card holder of a credit card which has a limit of US $3000. You cannot exceed this limit, if you do, the card will be claimed as exhausted and you will not be able to pay for the goods which are going over your card limit. Instead, you can pay the amount which is exceeding in cash or hold it off for next time.
A debit card program is set at times to allow the holder of the card to gain some benefits. These programs can be offered in different places with different benefits depending on how one can use this service.
In more simple words, credit cards hold credit balances, while debit cards hold debit balances. With debit cards you can buy goods and services, or you can withdraw any cash as well, but the money used will belong to you only; it will not belong to another person, not even the bank. A credit card allows you to make purchases by letting you borrow money from the bank, which have to be returned at the end of the month, or eventually, and some banks charge interest as well.
Retail Store. These cards are often used to make purchases at retail stores as well. You may use your card to buy anything from the latest trends in fashion snacks. As long as your card is not exhausted you may buy anything.
Retail Stores. The debit card program can be availed at retail stores as well. The same applies for them too; you may receive small perks on getting a certain amount of points, or you may receive more benefits by becoming their member, but you must remember to refill your card at the end of each month.
Gas Station. Credit cards can be used to pay for the gas or items bought at a gas station, but depending on the programs which gas stations offer, they may not be beneficial for you. On the other hand, gas stations use their own debit card program which they know their customers can benefit from. When their customer avails the debit card at the gas station, they receive points which they can use to get small perks such as free goodies, or free gas.
The negative aspect of this program is that you can only have access to the amount recharged within your card and you cannot exceed its limit.
What a Credit Card Does. The holder of the card may avail it only till a certain limitation. A credit card allows the holder to pay for the goods and services they want to avail but only within the limit of the card. For instance, if the card holder has a limit of US $2000, the owner cannot exceed this limit; if they do, they can pay the payment in cash which is due.
For example, let's say you are the card holder of a credit card which has a limit of US $3000. You cannot exceed this limit, if you do, the card will be claimed as exhausted and you will not be able to pay for the goods which are going over your card limit. Instead, you can pay the amount which is exceeding in cash or hold it off for next time.
A debit card program is set at times to allow the holder of the card to gain some benefits. These programs can be offered in different places with different benefits depending on how one can use this service.
In more simple words, credit cards hold credit balances, while debit cards hold debit balances. With debit cards you can buy goods and services, or you can withdraw any cash as well, but the money used will belong to you only; it will not belong to another person, not even the bank. A credit card allows you to make purchases by letting you borrow money from the bank, which have to be returned at the end of the month, or eventually, and some banks charge interest as well.
Retail Store. These cards are often used to make purchases at retail stores as well. You may use your card to buy anything from the latest trends in fashion snacks. As long as your card is not exhausted you may buy anything.
Retail Stores. The debit card program can be availed at retail stores as well. The same applies for them too; you may receive small perks on getting a certain amount of points, or you may receive more benefits by becoming their member, but you must remember to refill your card at the end of each month.
Gas Station. Credit cards can be used to pay for the gas or items bought at a gas station, but depending on the programs which gas stations offer, they may not be beneficial for you. On the other hand, gas stations use their own debit card program which they know their customers can benefit from. When their customer avails the debit card at the gas station, they receive points which they can use to get small perks such as free goodies, or free gas.
The negative aspect of this program is that you can only have access to the amount recharged within your card and you cannot exceed its limit.
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Credit cards may be very tricky as they may easily allow someone feel the need of buying useless items which are not needs, just wants. A debit card program may not always be an advantage either depending on its perks and your budget.
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