What are the advantages of a debit or credit card?

Answer 1

There are many advantages to using Credit and Debit Cards. Many cards offer rewards such as cash back, air miles and points toward free gifts. In the case of credit cards, they offer the ability to pay for purchases over time. Debit cards, which are linked to a checking account, allow people to pay for their purchases without using checks or cash.

1. History
   • The use of credit cards in the United States started in the 1920s. However, credit cards were used in Europe dating back to 1890. Debit cards became popular in most countries starting in the 1980s, though they are still rarely used in Japan.
   Types
   • The major types of both credit and debit cards are MasterCard and Visa. There are also Discover and American Express general purpose credit cards. Gas companies and department stores also frequently issue cards to be specifically used at their businesses.
   Considerations
   • While a credit card is advantageous because purchases can typically be paid back over time, it is important to consider how much extra debt can be comfortably carried in a household budget. Interest rates, which can exceed 20 percent per year, tend to create significant debt depending on how much the consumer spends on credit-card purchases. Credit cards must be paid each month to keep the account active and maintain a positive credit standing.
   Benefits
   • A debit or credit card is usually protected against unauthorized purchases in the event of loss or theft.
   Features
   • Some credit and debit cards also come with the ability to create unique card numbers for online purchases. This is a security measure to help prevent your card number from being hacked.