When paying with a check card, should you choose the credit or debit option? The difference is in how long the transaction will take to post. "What you should take into consideration when deciding whether...
"What you should take into consideration when deciding whether to use the credit or debit option", says Gwen Evans, banking professional with ten years experience, "is that when you use the credit option on your check card, the transaction will take 2-3 days to post to your account. When you use your debit card the money will be deducted from your account immediately."
When making the decision whether to use a debit or a credit card when making a purchase the answer is not necessarily cut and dry. Using a debit card is essentially a replacement for check writing. With that being so, it would make sense to use a debit card whenever you would normally write a check. The question of debit card vs. credit card is not an either/or decision. Both cards have a great value. When the checking account has run dry, it is great to have the credit card for a back up. However, this reservoir will eventually run dry if the balance is not paid back in full or close to it each month.
It is smart to choose the debit card for everyday budgeted purchases like groceries, clothing, and monthly bills. A debit card should also be used for impulse purchases. This will help control the compulsive shopper. Any other reason you might normally write a check, it is a good idea to have the money come directly out of your account by using a debit card.
Of course, if you are out of money in your checking account and have a need that cannot wait, available credit is a great fallback. In addition, there are several other reasons a credit card should be used.
You should use the credit card for additional security. In most cases, when there is a chance that your banking information can be stolen, using a credit card greatly lessens your liability. Should theft occur, although it is very likely that you will get your money back, losing money from your checking account is a bigger inconvenience than losing access to your credit line for a few days.
Although it makes sense to pay gas purchases with your debit card, blocking can cause you a great deal of headaches and a few bounced checks. Blocking happens if you buy ten dollars worth of gas with your debit card, the station may routinely block all transactions for $50-75, then doesn't "un-block" as you drive away -- it waits until that evening, or worse, every few days to conduct a "batch" transaction. Blocking is also common in hotel and rental car transactions (the ones that will take debit cards to begin with). In these cases, a using a credit card is wiser.
You should also use a credit card when making a large purchase. The federal Fair Credit Billing Act allows you to withhold payment on any damaged or poor-quality goods or services purchased with a credit card. You may withhold the payment while the credit card company investigates your claim. If you pay the charges for the goods on your credit card bill before the dispute is resolved, you will lose your right to make a claim.
