Which is Better for Your Credit Score, Debit Card or Credit Card?

Credit Score Improve

One’s credit score is very important as it determines the kinds of loans one will qualify for as well as the interest rate they will pay. Loan lenders do not issue out loans without finding out what your credit history is like. They can understand the kind of debtor you are by obtaining your credits core. For anyone out there, it is likely that you will need to borrow some money at one time or another, which is why your credit should be important to you.

Debit and credit cards are very common today as a means of payment. Many people are skeptical about carrying cash whenever they go shopping. Since cards are less risky, they end up using either a credit card or a debit card. The two cards can be very convenient but the best to use is the debit card if you are worried about your credit. A credit card allows the user to pay for goods and services on credit while a debit card allows you to transfer your own money electronically to another account whenever you are making a purchase.

Whenever you use your credit card to make payment, you are using borrowed money that should be paid back later with interests. Debit cards on the other hand use money that is in your own account to make payments. With a debit card, you do not worry yourself about high interest rates because you are only using money that is in your account. Debit cards are just the same as paying for goods and services in cash only that they are a lot safer that cash payments. In case your debit card is lost, you immediately call your card issuer and your account will be frozen, protecting your money.

There are many more reasons why you should use your debit card more than your credit card especially if you are worried about your credit score. Some of them are:

1. You never get into debts whenever you use your debit card. The money you spend when you pay using your debit card is your own money, therefore making payments this way does not affect your credit score. This is not the case with credit cards though, because every time you swipe your credit card, your credit score is affected.

2. You do not have to worry about interest rates either when you use your debit card. This is because you are not required to pay back the money that you have spent. Credit cards are highly charged especially if you are unable to pay within the grace period. Whenever you shop, the only things you think about are the increasing interest charges and how much more than you have used you will be paying in the end.

3. You can pay less on tax: a lot of people are not aware that one might save so much money on tax if they pay it using their debit card. Credit card users are usually charged more, and this means that you will incur more debt than you already have. If you are paying less with a debit card, chances of paying on time at all times are high; therefore, you are able to stay out of debt.

A good credit score will make your life easier especially if you are anticipating getting a loan in the future. It also helps you get better terms whenever you are signing up for services like insurance. Using a debit card more than a credit card will help a lot in achieving this.

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