Higher Limit
Buying with a safety net is always more fun that getting to the cash register and running out of money. It is just hard to put something back or to walk away from a purchase. Taking a credit card means you do not usually have to worry about running out of cash.
You Don’t Have To Wait to Buy Something
While overall, you will save money if you save money for a big purchase rather than use a credit card to make a big purchase (since the interest you will pay on the balance is insane), often times, it seems like it will take forever to save for something. Sometimes, it is just more fun to buy and use something while you are paying it off rather than having to wait until you have enough to pay for it.
Simple Access to Cash
You might have the money somewhere, but it is not readily accessible through your debit card. For example, you might have a separate checking account or maybe you have money socked away in investments or CDs. In this case, using a credit card can be a much easier way for you to spend your money. You can pay your credit card balance at home when you have time to move your money around. Debit cards are usually tied directly and specifically to one checking or savings account. The sales merchant does not care that you actually have the money socked away somewhere unless you can access it right at the moment of sale for him.
Merchant Acceptance
Probably the most reasonable reason people prefer to use credit cards to debit cards is that credit cards are much more universally accepted by store merchants. Who wants to walk into a store to find out that they do not accept your debit card?
One way to get over this issue is to use a credit debit card. Merchants accept this card as a credit card as far as how they process it. However, after the merchant is done with his or her end, the “charge” is treated like a debit to your savings or checking account (whichever you tie the credit debit card to).
Consumer Protection
Another reason people prefer credit cards to debit cards is consumer protection. If you buy something and then get into a disagreement with the merchant over the product, most credit card companies will protect you, the consumer and refuse payment to the merchant if you have a valid point (i.e. something was wrong with the project but the company wouldn’t give you a refund). When you buy things with your debit card, it is the same thing as buying with cash. Therefore, you do not have any help on your side in case you get into a disagreement with the seller over the sale.
If you lose your credit card, you are only liable for a small part of whatever is charged to your card. If you lose your debit card, anything taken out of your checking or savings account (assuming that the thief has your PIN number) is gone. You do not get it back unless the police can find the thief, successfully prosecute and somehow get your money back.
Peter Carville is a freelance article writer who writes for Financial Facts about the current financial news and the credit crunch.
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