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February 3,2009

  • Credit or Debit; What's the difference?, Pt.2
     – Convenience comparison.



    • Acquiring:  Although credit cards can be fairly convenient, debit cards win this match hands down. At the bank, when you open a checking, savings or money-market account, a debit card is either handed to you on the spot or else, arrives in the mail within a few business days. With a credit card, one must first apply for an account and then be approved. This can require an hour's worth of grueling personal questions and take weeks to receive the credit card in the mail (usually only a 20-minute phone call and 3-5 business days for the mail, though.)
    • Security: This varies between merchants. At the gas pumps a debit card will probably require something – billing zipcode or PIN. Often credit cards don't require anything. Sometimes a billing zipcode but, never a pin. Other places, the convenience reverses. Debit cards become ‘cash', while credit cards usually require a signature and, on occasion, picture ID (very smart idea).
    • Extended-buying: Credit cards offer the ability to make a purchase of more than you have in the bank. Except for big items like refrigerators, it's important to not charge more than you can completely pay off within the next two billing cycles. Otherwise, the balance can keep building until it becomes a serious problem. People who have mastered the discipline of spending can stretch longer only because they already have a target payoff date in mind before spending and will successfully make it happen. Not a good idea only based on will power alone. Will power alone often gets derailed.
    • Common: Both types of cards free a person from having to carry cash or a check book. They're both easy to use and accepted most places of business that are set up for electronic financial exchange.

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