It is far easier to pay with a plastic card than it is to pay with cash, but the sort of plastic card you use still has an impact. For one thing, the functionality of a credit card and a debit card differs, and each has a number of advantages and disadvantages. As its name suggests, a debit card links to your checking account for purchases. With a debit card, the money is debited from your account balance when you use it to make a transaction. Credit cards, on the other hand, provide you access to a line of credit from which you can borrow. You can select paying off your bill in full or making a minimum payment and carrying a load over to the next month when you use a credit card (or months).
Using a debit card has several advantages.
Having the ability to withdraw funds immediately from your checking account might save you from accruing further debt.
Annual fees are not common on debit cards.
Your personal information is protected using encryption and chip-and-pin technology.
Even if you have bad credit, you may easily acquire a debit card.
Disadvantages of debit cards
Credit history is not improved by using a debit card.
Your debit card may be denying you certain money-saving benefits if you just use it to make purchases.
Overdraft costs, international ATM fees, and monthly maintenance fees are common.
When it comes to debit cards, zero-fee policies are less common, making you more exposed to theft.
To avoid liability for fraudulent debits on a debit card, you must notify your bank within 60 days of discovering them on your bank account. In contrast, if your debit card is lost or stolen, you need to take action fast to avoid being held responsible for fraudulent transactions:
If you don’t report the theft or loss within two business days, you’ll be responsible for up to $50 in damages.
If you don’t disclose the theft or loss within 60 days after receiving your statement, you might be liable for up to $500.
If you do not report the problem within 60 days of getting your statement, you might be held fully accountable.
If your credit card is taken, your liability for credit card theft is limited to $50. You are not liable for any unlawful use of your card if your personal information was taken but you were always in possession of it.