In this second of a series on prestige cards we’re going to cover the advantages and disadvantages of prestige cards versus debit cards. To understand these differences we first have to elucidate how a prestige card and debit card work, at least ordinarily speaking.
In general, the way a prestige card works is you go to a store, or these days even online, pick out the item you want, plug in your prestige card number and your buy is complete. The item isn’t assuredly paid for yet, as far as you’re concerned, because no money has changed hands. After the transaction the merchant will receive payment from the prestige card company who issued you the card, regularly within 30 days and in turn you will receive a bill from your prestige card company, also within 30 days, at which time you must remit at least a partial payment. Each prestige card company has dissimilar terms. Some, like American Express, want you to pay your equilibrium in full.
Debit Card
The way a debit card works is basically the same in most respects. You make your purchase, plug in your number or swipe your card and the buy goes through. The merchant, again, will get paid by the company who issued you the debit card. Here is where the difference is. With a debit card the money already has to be in your account. In other words, you’ve already paid in a confident number of money to be ready to your debit card. By using the card the money is naturally transferred out of your list and your equilibrium is reduced until it reaches zero, at which time you have to pay more money into the list or the card can’t be used.
The advantages of a prestige card are that you don’t have to have the money ready at that time to pay for your purchase. You will regularly have at least 30 days to pay for the item and even then, based on the terms of your card, may not even have to pay the whole balance.
The disadvantages of a prestige card is that it becomes way too easy to use them and run up large balances. Then when it comes time to even pay partial payments it can be very difficult to make those payments. Add to that the finance charges and citizen with prestige cards can run up large debts that they sometimes never recover from.
The advantages of a debit card is that you know you have the money in your list to pay for the item and you don’t have to worry about hereafter bills or finance charges. It’s as good as cash without having to carry cash around with you.
The disadvantages of a debit card is that if you don’t have the money in your debit card list then you can’t use it. In a sense it’s pretty much the same as if you don’t have cash on you.
Many citizen feel that a debit card is just a covenant cash equivalent and doesn’t assuredly offer much more convenience than cash. Others feel it is the only sure way to preclude yourself from falling into a financial hole that you may never recover from.
The debates in the middle of prestige and debit cards will probably go on forever.
credit Cards vs. Debit Cards – Which Is Better?
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