Are Debit Cards More Popular Than Credit Cards?
Credit cards offer cardholders the opportunity to borrow money whenever they need it, and as long as the balance is repaid before the billing cycle is over there is no interest charged. Debit cards offer cardholders instant access to their bank funds, and financial convenience without the stress of having to worry about debt. So which is more popular – credit cards or debit cards?
Debit – The New Credit
About a decade ago credit cards were at their peak in popularity, and it seemed as if every other person either had a credit card or wanted one. Now, after enduring nearly a decade of harsh economic times, the majority of the population is dealing with debt in one form or another, and many people are intimidated, or unable to use a credit card. However, the convenience of using plastic instead of paper has not been forgotten, and many people have begun using simple debit cards to purchase items and complete most daily transactions. Even so, credit cards are still heavily used by the American public, and are only slightly less popular than debit cards.
Why Are Debit Cards More Popular?
Aside from not having to worry about credit card debt and monthly repayments, debit cards are also much easier to acquire. Most banks do not consider credit score as a factor when issuing debit cards, since no money is being loaned in order for the debit card to be utilized. When a transaction is conducted with a debit card funds are taken directly from the cardholder’s bank account, which basically eliminates the bank’s risk. In basic terms, anyone that can be approved for a checking account can have a debit card. Even people that owe thousands of dollars in credit card debt have checking accounts with debit cards.
Credit Card vs Debit Card Security
Even though debit cards are becoming increasingly popular, and are more commonly used than credit cards, better fraud and theft protection is provided with credit cards. When a credit card is stolen, by law the cardholder only required to repay $50 of the incurred fraudulent charges. Unfortunately, when a debit card is stolen, many times thousands of dollars can be charged towards the balance before the cardholder is aware of the situation. Some debit cards do provide theft protection and other additional security services, however most regular checking account do not include these features by default. When using a debit card it is important to enquire about any security services that can be added to the checking account in order to provide protection against card theft and and fraud.