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6 Great Debit V Credit Ideas That You Can Share With Your Friends | debit v credit

If you're like most people who shop at a local store, then you have both debit and credit cards. You can use debit cards for purchases that you make online and offline, but you can't make any purchases with them at a gas station or grocery store. Nowadays, however, many people are converting their debit cards to credit cards. This is mainly because debit cards are often offered at a much lower rate of interest than their credit-based cousins.

With a debit card, you simply add money to the bank account where the card is linked. Then whenever you make a purchase – be it a purchase from the store, a service, or even a debit card purchase from your own bank – you are adding money to your bank account. You never have to cash out the money on your card.

With a credit card, the situation is a little different. When you use a credit card, you are using a credit. The card company reports your spending on its records. It then factors that spending into its formula for determining your credit limit. The higher your limit, the more you can buy without paying a cash advance fee.

But what if you don't have enough money in your bank account to purchase all the things you want? Don't worry. You can still use a debit card. In fact, you can use your debit card as much as you like until your balance goes way down. Once your balance goes down to zero, you won't be able to take advantage of your credit privileges any longer.

Many people who are converting their debit cards to credit cards are doing so because they like the idea of having credit. They like the convenience of having a credit card and a place to pay every month. And, yes, there's something nice about being “good” – whether it's having free money in your pocket or being able to buy the things you want. But, if you're converting your debit card to a credit card, you should be aware of how it will affect your credit score.

Here's how it works. When you use your debit card to make purchases, you have to first write a check for the total amount of the purchase. Then, your statement arrives at the end of the month. On your statement, you'll see where you spent the money and you'll see the charge-offs and the balance due. If the statement shows that you paid off the entire credit line, you may not see a drop in your credit score. However, if the statement indicates that you paid only a small amount, your credit card company may be reporting that you only paid a portion of your balance, which will drop your credit score.

This problem is most likely to happen if you don't open a separate checking account. If you already have a credit card, you can still use it to pay off the debit card. For one thing, this type of transaction goes through the credit reporting bureaus twice as fast. This means that each time you make a purchase, you are potentially opening up two lines of credit. If you decide to close your account, however, you are keeping the credit line open and reporting to the credit bureaus that you are still making purchases using your debit card.

The worst part about this whole scenario is that you have absolutely no control over what happens to the money you've paid with your debit card. It goes right into your debt and is owned by the company who issued the debit card. That means you'll be stuck with whatever the company decides to pass along – and usually nothing much at all. You won't get to keep any of it. You won't be able to pay your creditors on time, and you won't be able to keep your credit cards in a credit union, savings account or other lender-controlled account. In short, if you use your debit card like you're used to using cash, chances are you'll be spending more than you intended, and you'll find yourself in debt way over your head before you know it.


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