Wise Transition from Debit Cards to Credit Cards

According to an article, Uh-oh: 63% of Millennials don't have credit cards, more than six in 10 people ages 18 to 29 don't have a single credit card in their wallets, reveals a survey conducted for Bankrate.com. 

They prefer to use debit cards. I think it is a good move to get involved with plastic cards, first a debit card, and then a credit card.

Advantages of debit cards

A debit card is linked to your bank account. Each time you use it to purchase an item; the amount is deducted from your account. It is straightforward and no credit is involved.  The most important thing is that no debt will be incurred.

It is a good learning process. You can’t use your card when there is no money in your account. In a way, it is effective to limit overspending. You spend only when you have the money. In the end, you develop a good habit to live within your means     

The bank only charge a nominal yearly fee for the issuance of a debit card

You use the card like cash and yet you don’t have to carry a large sum of money while travelling and reducing the risk of loss and theft.

By using a debit card it is easier to budget your expenses because whatever payment made it is deducted from your bank account immediately.

Like a credit card, a debit card is accepted worldwide.    

Advantages of credit cards

It is a good move to switch to a credit card after using a debit card for some time. After a while, a good habit has already established to use your credit card like a debit card only when there is a fund available in your bank account.  As you grow older you will be more mature to handle a credit card.       

A credit card is essential in your financial life. A credit card is an excellent tool to establish your creditworthiness and build credit scores.   

When you make a prompt payment you don’t incur late fees and interest charges. As a credit cardholder, you can earn cash back or reward points for each dollar you spent.

Furthermore, it is much safer to use a credit card because you can always dispute a transaction that is not in order.

Conclusion

Manage your finance by using a debit card first. Switch to a credit card when you are in control of your money by not spending impulsively.