Credit Card Disadvantages
Using a debit card to make a purchase is spending one’s own money that they deposit in their bank’s checking account. Same idea applies with cash; though, without the bank. With a credit card, the bank lends a limited amount of credit that an individual would spend and pay back every month (varies on the credit card provider). It’s basically borrowing money and repaying back. Now, at this point, a clueless consumer may be wondering, “Why should I use a credit card over a debit card or cash? I’m scared a credit card will put me in debt because of interest and all of that shenanigans?” First and foremost, let’s quickly get this crazy thought out of the way. The main reason of why an individual goes into debt is if they don’t pay off their balance for their credit card every month. This shouldn’t happen if the person can spend a credit card like a debit card and pay off their balance every month (automatic payment makes this process painless). Now, back to the hypothetical question. Safety would be the main reason to choose a credit card over a debit card.