Debit or Credit? Pick a Card

This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing the differences between debit and credit cards, and when it might be better to use a credit card:

Americans use debit cards more often than credit cards, but they tend to use credit cards for higher-dollar transactions.

The average value of a debit-card transaction in 2018 was just $36, while credit-card transactions averaged $89.

This usage reflects fundamental differences between the two types of cards. A debit card acts like a plastic check and draws directly from your checking account, whereas a credit-card transaction is a loan that remains interest-free only if you pay your monthly bill on time. For this reason, people may use a debit card for regular expenses and a credit card for “extras.” However, when deciding which card to use, you should be aware of other differences.

Fraud Protection

In general, you are liable for no more than $50 in fraudulent credit-card charges. For debit cards, a $50 limit applies only if a lost card or PIN is reported within 48 hours. The limit is $500 if reported within 60 days, with unlimited liability after that. A credit card may be safer in higher-risk situations, such as when shopping online, when the card will leave your sight (as in a restaurant), or when you are concerned about the security of a card reader.

If you regularly use a debit card in these situations, you may want to maintain a lower checking balance and keep most of your funds in savings.

Merchant Disputes

You can dispute a credit-card charge before paying your bill and shouldn’t have to pay it while the charge is under dispute.

Disputing a debit-card charge can be more difficult when the charge has been deducted from your checking account, and it may…

To Read the Entire Article, Please Click Here.

Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 22 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

Please let Craig know that the Green Bay News Network Sent You!

CMS Retirement Income Planning

Craig Siminski is a Retirement Income Planner professional with twenty two years of experience. His goal is to help ensure his clients will have enough income to maintain their dignity and independence in retirement.

Craig is committed to designing and implementing financial strategies that focus on his clients’ needs.  He seeks to be a lifetime resource for each and every client.

Give him a call at 920-569-8363 or email him at csiminski@equitydesigngroup.com and tell him the Green Bay News Network sent you!