5 Reasons To Use A Credit Card Instead Of Debit

Although credit cards and debit cards look similar, they use very different methods to pay for purchases. Swiping a credit card pays for your purchase with borrowed funds from the credit card company, which you must pay back in the future. Swiping a debit card, on the other hand, draws the money immediately from your checking account. There are several reasons you may want to choose a credit card over a debit card. We break down a few scenarios.

Increase Fraud Protection

Consumers who use credit cards have more protection against fraud and identity theft than those who use debit cards. If a debit card is stolen, your bank account can be drained right away and it can take a while to dispute the theft and get your money back. On the other hand, credit card users have zero liability and also get a wide range of protections for refunds one faulty products. Particularly when paired with identity theft services like Lifelock, credit cards are the way to go. If you want to learn more, Lifelock’s on Twitter and frequently posts helpful information about fraud protection.

Build Credit History

Debit card use doesn’t go on your credit report, whereas on-time credit card payments and a high percentage of available credit both help you build a positive credit history, says The Street. These factors improve your credit score and can help you get credit in the future at low interest rates. If you don’t have or use any credit cards, you will miss out on this easy boost to your credit score. That’s why it’s important to use and pay off your credit card on a regular basis.

Have Freedom to Pay Later

If you’re in a pinch and don’t have the money in your bank account for an emergency situation, a credit card can save you. Minimum payments are only a small percentage of your balance, so you can charge now and pay as you are able. This freedom can save you if you need to make emergency repairs to your home or car or need a little extra help with everyday expenses during a time between jobs.

Earn Better Rewards

Although some debit cards offer rewards programs, credit card rewards are typically better, according to ABC News. You can often get up to 5% cash back on specific categories of purchases on credit cards, earn rewards miles, or use store cards for deep discounts. Especially if you pay your credit card bill in full every month to avoid interest, using the card to get the rewards is a great strategy.

Avoid Holds on Bank Account Funds

When you’re buying gas, renting cars, or booking hotels, credit cards are much better to use than debit cards. This is because these types of businesses put a hold on your funds until they know the final amount you’ll spend. In the meantime, you can’t access this money, and it’s often a much higher amount than you are ultimately spending. If you use a debit card, this ties up money and you may accidentally overdraw your account.

What to look for in a Financial Planner

Most people would never consider installing a new transmission in their car by themselves. They don’t have the time or skills, so they hire a mechanic for peace of mind. Many of today’s investors take the same approach to investing and get expert advice from an experienced financial adviser.

 

The 77 million Americans who are preparing to enter retirement want to ensure their savings won’t run out. The average investor, however, doesn’t understand market fluctuations or complex financial products. Studies show that those who seek the advice of a financial adviser are more confident about their financial futures-but how do you find the right person for the job?

 

Step 1-Identify your needs. Whether you need assistance with retirement planning or saving for your children’s education, you should define your financial objectives before you begin your search for an adviser.

 

Step 2-Ask friends, family and co-workers to make recommendations. Your financial adviser should be someone you trust-you’re putting your hard-earned money in their hands.

 

Step 3-Interview at least three advisers before making the final selection.

 

During the interview process, there are many factors to consider. Look for an adviser who has extensive experience in multiple areas, including investments, insurance and retirement planning. You will also want to inquire about the adviser’s licensing-he or she should have a Series 6 or 7 registration in good standing. You can check an adviser’s record by contacting the National Association of Securities Dealers (NASD) at (800) 289-9999.

 

Once you’ve confirmed that the adviser has a good track record, it’s time to delve deeper into his or her personality. A good adviser will consider all aspects of your financial situation and design a customized plan to help you achieve your goals. He or she will provide the same level of service to all clients, regardless of how much they invest. It’s also critical that your adviser’s “investment philosophy” is consistent with your own. For example, an adviser who favors risky strategies is not a good match for a conservative investor.

 

 

Financial Success Guide for the College Student.

Financial success may come in different forms. Financial success does not only mean that you are financially independent, or you have been able to make thousands of dollars off the stock market. To be financially successful, may mean making sure by the time you graduate from college, you are not in debt or worse off than you started.

 

As essential as it is to secure a part-time job to support your personal wants, you must be aware of the “hidden regressors” that come uninvited. Your first check in the mail, brings you to some degree, some feeling of accomplishment. Your adult life is just beginning, where you see the value of getting paid for work done. It goes without say that it’s at that time where you start to take on additional responsibilities. The importance of communication and being able to be reached wherever and whenever, prompts you to procure a wireless. The apparent need of getting to and from your job incurs the cost of driving insurance, gas and all other related transportation expenses. Indubitably, acquiring a job doesn’t always mean money inflow; it creates a path for money outflow. One needs to be prepared for the unexpected and the ability to be financially successful.

 

Credit cards: a friend or a foe? When the due date for bills draw nigh, and the checks are not coming in as often as you would have expected, many students feel pressured to use credit cards as a means of a short-term loan. This method where you plan on immediate repayment is not harmful; however, many students misconstrue that credit cards are an invention to make college life luxurious and comfortable. Wrong!

 

Saving is sometimes barely doable for some students, since they end up owing money to all these credit card companies. Our system is designed so that without good credit, one is limited from doing a lot of things. It is thus sagacious if we use our credit cards wisely. Use credit cards for things you know will definitely bring you a return. For example, use your credit cards to buy gas to take you to work. When you decide to use your credit cards to buy all the possible clothes on sale; and the purchase is backed by the conviction of repayment after you graduate, put the credit card back in your book bag.

 

Credit cards can either make you or unmake you; this is because if you use them wisely, once you graduate, it will be easier to get a loan for a new car or a lower security deposit on that new apartment. For the college students that work, there is always a possibility of saving your money, even if you can’t save a lot; you can still save a little. Try to research online, for banks that offer high interest rates on their savings account. The proliferation of online savings accounts has undeniably increased the interest rates, and thus the potential to earn more on your savings.

 

To be financially successful means to be free from debt, in the college perspective it is to try to avoid a post-graduation debt. The “broke college student” has the ability to be financially successful, if means are taking to save more and use credit wisely.