Credit Card Offers Compared to Debit

Credit cards and debit cards have a few similarities, but many differences. Even so, many people seem to get confused between the two and many good credit card deals are thought of as good debit card deals by people that sign up. They then receive their card, spend with it and are surprised when no money comes out of their account.

On the outside, one can see the reason for the confusion. Debit and credit cards look very much alike and both of them will possess a bank logo. They both are plastic and carved in the exact same shape. Both of them are also magnetized, with a stripe running across the back of the card.

Outwardly, they look the same. Inwardly, there are a lot of differences.

Method of Payment

Credit card deals furnish people with credit cards that are used in the same physical method as a debit card to make a purchase. However, the mechanism underlying the payment is different for each type of card.

Debit cards make payment by authorizing the merchant to transfer funds from a bank account linked to the card. The funds need to be available for card to be used and are immediately taken away upon use of the card.

Credit cards are different. They do not need money behind them, as the whole idea is that money is being borrowed to cover expenses. They work by extending credit to the card holder and payments are made on a periodic basis after receipt of a bill listing all the charges that have been made on the credit card.

Fraud Protection

Fraud protection is a huge difference between credit cards and debit cards. Part of any of the good credit card deals is the access to credit card fraud protection.

Credit cards will universally allow the card holder to be responsible for no more than $50 of fraud money, provided they report the fraud within a reasonable amount of time. The best credit card deals may even cut down on that amount, but even bad credit card deals will only allow the customer to be responsible for $50.

Debit cards also offer the $50 fraud protection, provided that you report the fraud within 48 hours. After that, the level increases ten fold and you are now responsible for up to $500 in liability. If you leave it further still, after 60 days you are now responsible for the entire amount in your bank account.

Legal Protection

Compare credit card deals all you want, but there is one thing that all credit cards have in common. Under the Fair Credit Billing Act, citizens and card holders of the United States have the right to withhold a credit card payment due to low quality or damaged merchandise. This provides a buffer zone between you and your purchases, allowing you some sort of recourse if your purchase turns out to be poor.

Debit cards are different. They draw the money directly from your account so there is no such buffer zone. The money's gone and already in the hands of the merchant, allowing them to do whatever they want with it.

Payment Timelines

Debit cards are about immediate payment, with the funds coming directly from your bank account. They do not offer the flexibility of controlling when your money actually leaves you, but the rigidity of their use pretty much guarantees that as long as you use your debit card, you can avoid getting into debt problems.

Credit card deals are different. All credit card deals result in getting a card that allows you to defer payment to the end of a pay period or even further if you're willing to accept the additional interest charges that would accrue on your account. With this additional privilege comes additional responsibility however. Many a person has been sucked in by the alluring siren song of increased credit and ended up overextending themselves to the point that their credit ended up in bad shape.

Which Credit Card Should You Use?

The ultimate answer is that it depends. The best credit card offers are going to have drawbacks in certain situations no matter how much you compare credit cards and research everything, while the best debit cards can result in large fraud problems if handled incorrectly.

If you need the rigidity of a plan that does not allow you to overextend yourself, consider using a debit card for most of your purchases. If on the other hand you prefer being able to defer actual payment and are confident enough in your discipline level, then maybe a credit card might be for you. In between those two extremes are a bunch of situational grey areas.