The way you sleep

By sourabh at 2007-08-12

Credit cards or Debit cards

I am really confused between credit cards and debit cards. I regularly gets calls tempting me to sign on for a credit card.

But the bank that i have my account in has given me a debit-cum-ATM card. The person who gave me the debit card told me it is a convenient mode of payment while purchasing goods.

New to both kinds of cards, I don't know which card will be more convenient when I would go shopping. For those of you who are confused like me, here are the pros and cons of using credit and debit cards.

While credit cards and debit cards may seem similar but they are quite different in the way they work and the services they offer. It's useful to understand the differences and know the advantages and disadvantages of each.

Credit card

A credit card allows you to borrow money when making purchases. The money isn't directly debited from your bank account at the time of purchase; instead, you are sent a bill every month for the sum total of your purchases.

You can choose to either pay your bill in full or in part. If you choose the latter, you will have to pay interest on the balance.

The ability to obtain credit is both a blessing and a curse. It allows you to fund big purchases when you are short of money, giving you the option to pay them off over a period of time. However, you must be disciplined and not spend beyond your means.

If you plan to borrow using your credit card, you also need to understand the terms and, in particular, the way interest charges are computed.

Some of the things you need to check are the annual percentage rate (APR) -- the interest rate for using the bank's money -- and whether there is a grace period for paying the full balance before being charged interest. If there is a 'low interest rate' offer, be sure to read to read the fine print about its duration and conditions.

There are a wide variety of credit cards with different features and advantages. For instance, gold and platinum cards are premium products for customers with high income and net worth. They have higher credit limits and also perks like travel insurance but usually have higher charges as well.

Co-branded cards are another interesting option; they carry the name of a third party, which may be a retail outlet, airlines and so on. Such cards will have benefits whenever you purchase products from the third party. They may also be co-branded with a charity that will receive a fraction of every payment you make with the card.

When choosing a credit card, you need to consider whether you intend to pay your bill fully every month thereby incurring no interest. This is always a good thing to do anyway. If you do pay your bills fully, the interest rate doesn't matter. You can choose credit cards with high interest rates if they offer attractive benefits like zero annual fees and rebates.

Debit card

The word debit means subtract and, as the name suggests, your debit card will subtract money from your account each time you use it.

A debit card has several of the advantages of a credit card in terms of convenience and reducing the use of cash and checks. Furthermore, you can use it as an ATM card as well, to withdraw cash from your account and carry out other ATM transactions.

However, you can't use a debit card to obtain credit. This can be an advantage since you can only buy what you can afford.

Furthermore, you don't have to worry about making regular payments or paying interest rates and penalties if you forget to make a payment. In that sense, a debit card is more convenient than a credit card.

On the flip side, because the debit card is linked to your account, it is less secure than a credit card. An unauthorized user may be able to clean out your account very quickly. This is why it is important to be especially careful when using a debit card.

Make sure you understand the policy in the event of theft or unauthorized use. If this happens, make sure you report it immediately. Memorize your PIN number and never give it to another person. Don't pick a PIN number that is easy to guess, like the last four digits of your phone number. When you make purchases with the card, make sure you take the receipts with you.

As with a credit card, you should know whether there are any annual fees or other fees for specific transactions. Also make sure you understand the policies and fees for using your debit card at ATM's belonging to other banks.

Few words about friendship on friendship day...

Have you ever had one special friend...
Who touched your heart with words they speak...
When you turn to them for words of advice...
They listen with open mind, and dont judge you...
They give you advice, which at times you do not follow...
But they laugh, and remain close to you...
They never criticize your bad points...
And always, are there when you have been hurt...
Telling you to keep your head up and walk proud...
You heed the words, knowing you trust them...
For they will never steer you wrong...
If you have words of disagreement. ..
You come together and talk it out...
After all the fuss, you laugh about it...
Sometimes laughing at it for years...
Then that friend moves away...
The distance is far, but still you keep in touch...
Remaining friends is more important than cost...
Cause friends will forever be there...
Regardless how rich or poor you are...
We all need those special friends in our life...
If you have a close friend, never let them out your life...
For one day you might need them, and they wont be there....