Did you realize that there are benefits of using a credit or debit card for every day purchases?
Evan Gomez, a Branch Manager for Mountain America Credit Union, joined us with the details.
First, there's the convenience and safety of not carrying around cash, especially large amounts. Plus, many places post-Covid have moved cashless too.
Evan says both debit and credit cards can hep with expense tracking so you know where your money is going.
There are some differences between credit and debit cards.
Debit cards will immediately remove the money you spend from your checking account.
Credit cards are a revolving line of credit, which is a type of loan. You don't pay for the purchase until you make a payment to the card issuer.
Many credit cards will offer cash back or rewards points for purchases made using the card. In fact, Evan says through June, 2023, Mountain America is offering double the rewards points for purchases made with its Visa rewards card.
Depending on your financial institution, your debit card usage may actually give you some benefits along the same lines in the form of waived fees or rewards points.
You are not responsible for fraud on either a debit or credit card.
A credit card does offer some additional peace of mind, because with a debit card, the money is withdrawn immediately from your checking account.
With a credit card, the charge appears on your bill, but the money isn't immediately taken from your checking account.
Using a credit card can affect your credit score, either positively or negatively depending on your usage. Debit cards don't have any effect on your credit score.
Finally, credit cards can allow you to budget across a longer period than a debit card because the money isn't withdrawn from your account until you make your card payment.
As long as you pay it off in full every month you won't be charged interest for doing that, so it can be a helpful budgeting tool for many people.
You can learn more at macu.com.
