By: Charlie Bathke
Credits vs debit can be used in two different ways. Credit vs debit within accounting and credit cards vs debit cards. Today I will be describing the differences between credit cards and debit cards and the pros and cons of each, but just for fun, I will add in what credits and debits are in accounting. A debit is an increase of assets or expense accounts and a decrease in liabilities, revenue, or equity accounts. A debit is always positioned on the right side of an entry. On the left side of an entry are credits. A credit is an increase in liabilities, revenue, or equity accounts and a decrease in assets or expense accounts. That is just a very basic overview of what credits and debits are in accounting, now let's talk about credit cards vs debit cards.
One of the few similarities of credit and debit cards is how they look. They both typically have 16-digit card numbers, expiration dates, and personal identification numbers. They both serve the purpose of making it easy and convenient to make purchases in a store or online. Though they have some similarities, they have many differences which serve as a strength and weakness.
Now that you have some background information on credit cards and debit cards, which one should you use? Deciding whether you should use a debit card or credit card completely depends on who you are. Most teenagers and younger people use debit cards as it makes it difficult to overspend when using them, you don’t pay interest on purchases, credit history will be unaffected, all purchases will be directly taken out of your bank account immediately which overall makes it easier to manage money. As you get older the better option may be to use a credit card as they give free protection against fraud, gives additional insurance on purchases, makes it easier to do returns and refunds, cards will offer cashback or reward points, and builds your credit score so you can make bigger loans
I hope that you learned the differences between credit and debit cards and know when to use which depending on the type of person you are!
Works Cited
Caldwell, Miriam. “Learn the Difference Between a Credit Card and a Debit Card.” The Balance, 28 July 2020, www.thebalance.com/difference-between-a-credit-card-and-a-debit-card-2385972.
Cussen, Mark P. “What's the Difference Between Credit Cards and Debit Cards?” Investopedia, Investopedia, 26 Jan. 2021, www.investopedia.com/articles/personal-finance/050214/credit-vs-debit-cards-which-better.asp.
I liked that you specifically highlighted the demographics that use each card and why, instead of just explaining the direct differences between the cards. I think that the amount of young people who use credit cards is increasing, as younger people are more aware of the benefits of having a high credit score, and want to increase their's as soon as possible. Additionally, I believe that many people are more knowledgeable about the risk of fraud and theft from a debit card, which has also led to a decrease in people using debit cards compared to credit cards.
ReplyDeleteThis is definitely an important topic to learn for future purchasing at an adult. Not knowing the difference could make financing difficult if not dangerous. Piling up credit card debt can be one of the highest hills to climb related to financing.
ReplyDeleteI liked that the formatting of your article is very linear, making it easy to distinguish between the credit and debit cards. Like Tyler mentioned above, explaining the demographics also helps differentiate them as actual choices with differing purposes rather than just differing methods.
ReplyDeleteI think this information is really important for those entering adulthood, as many will get their first credit card and be very irresponsible with it.
ReplyDeleteThis is really helpful, thank you! On first glance, debit may seem like the obvious choice because you don't have to pay interest, but on a deeper look there are very good reasons to use credit. It amazes me how most of our money and our transactions are imaginary. Most of our money is recorded on computers, rather than held in actual bills, and when we make purchases, we usually don't hand over actual money. It definitely takes a lot of trust in the system!
ReplyDeleteThis article was very helpful in the sense that it gave basic background information about both debit vs credit both in the bank and on the card. Everyone has their own reasoning for choosing when to use debit or credit, but these articles gave pros and cons for each type of paying option. Many people don't know the difference and how much trouble they could get in if they do something wrong. Credit cards can be scary because you don't pay right away and if you don't have the money at the end of the month, you get in trouble; on the other hand debit cards allow people access to their money right away. I can not see when and why to use debit or credit.
ReplyDeleteThis article was very helpful for people our age because we are starting to, or already have credit or debit cards. I have a debit card and it's very convenient but I am always afraid I am going to run out of money. My credit card on the other hand is used for gas, and that's very nice because I never have to worry about it getting declined because of the amount of money. I thought this piece was very helpful in deciding which is better for you personally, very well done!
ReplyDeleteI have been using a debit card for a while now. When I first looked at this difference, I talked with my parents, and they explained everything that you just did in this blog. I personally think debit cards are much better than credit cards, because with a credit card, you can spend way more, allowing you to spend on unnecessary things. However, with a debit card, you are more attentive to your current balance, and get the other benefits you described. Overall, I liked your blog, though I thought you could have gone a bit more in depth when talking about credit and debit in regards to accounting. Other than that, it was very helpful!
ReplyDeleteI think that this was very insightful for young adults who will be having to apply this knowledge very soon. I appreciate the explanation of both credit and debit and how both are applicable in the financial world. I typically use credit when making purchases online as the added protection you mentioned, as filing a dispute can protect you from such fraud you explained. Credit can also build your credit score for when purchasing and financing a home or car, which can end up saving you money if you make educated decisions.
ReplyDeleteThis article was very useful! I did happen to know about how each card typically have 16-digit card numbers, expiration dates, and personal identification numbers. They both serve the purpose of making it easy and convenient to make purchases in a store or online. I have been using a debit card for quite awhile now and this was something that served as a refresher but something I did not know was that there is not fraud protection on your debit card but there is on your credit card. Also this part was something I found very helpful, “As you get older the better option may be to use a credit card as they give free protection against fraud, gives additional insurance on purchases, makes it easier to do returns and refunds, cards will offer cashback or reward points, and builds your credit score so you can make bigger loans.” Good Job Charlie!
ReplyDeleteHonestly I didn't even know what the difference between a credit and debit card was before I read your blog post and I thought that the information that you gave was extremely informative and useful. I especially thought that the graphics that you gave were helpful in showing the difference between these payment types. I agree with you that debit cards are better for teenagers since they make it harder to overspend. I think in the future, using a credit card will be more useful but currently a debit card is better for my current lifestyle since I am not making extreme purchases on things like hotels.
ReplyDeleteDebit and credit cards have always been a gray area for me and your blog post helped me out a lot. Something I noted was how helpful your images were, they gave credibility and also helped me follow along. You stated that debit cards are better for teenagers and while I mostly agree, I also think it depends on the teenager. But overall yes, I believe debit is better for teens.
ReplyDeleteI think that most people who are finishing high school don't really know how either credit cards, or debit cards truly work, which makes them unable to take advantage of each of their own usefulness. This post really cleared a lot of that up for me, and made me think of circumstances that debit/credit cards would me more useful in rather than the other. What are some circumstances a credit card would be more useful in rather than a debit card?
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