Credit vs. Debit Cards: Weighing the Options
05/12/08 - 02:29 PM EDT
Peter McDougall
Debit cards also allow you to get cash back at some retailers. While you can make withdrawals at just about any ATM, you'll typically have to pay a few-dollar fee every time you go outside your bank's network.
Advantage: Debit Interest When you make a credit card purchase, there is a delay between your purchase and your payment for that purchase. In the interim, your money can sit in your savings account earning interest. Of course, this only works to your advantage if you pay the purchase off in full. Meanwhile, a debit card transaction comes out of your account within a few days. Advantage: Credit The Upshot Despite the current popularity of debit cards (a 2006 Federal Reserve Board report found that debit card usage has surpassed credit cards in transactions at the point of sale) you are likely better off using a credit card, provided you keep your balance as low as possible. You can compare credit card rates, offers and more at BankingMyWay.com.
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