We all know how the advantages of having a good credit score. It allows you to get lower premiums for insurance, and in some cases, it is also used by employers to gauge how reliable an employee you are. Unfortunately, getting a good credit score is difficult, especially if you own a credit card. The effect of the recent financial crisis is still fresh in our minds ¨C most of us are still suffering from it. Using credit cards is damaging, especially if you don’t know how to manage your resources properly. A careful consideration of your free credit report can give you many insights.

Despite these disadvantages, many people still prefer to hold credit cards because of the convenience it offers. With credit cards, you no longer have to hold cash, hence decreasing your chances of getting mugged. Also, cards are so much lighter to carry, and it allows you to purchase the things you want immediately without having to withdraw from the ATM. If you are looking for the convenience of credit cards, but you want to avoid overspending then there¡¯s another option available ¨C debit cards.

Debit cards work like your credit cards minus the obscene charges of the credit card companies. It allows you to purchase your needs with just one card, but the main difference is that purchase is already paid from your savings account. This is a better alternative than using your credit cards since they will be spending money that they actually have.

Credit, ideally is good since it gives you the ability to get what you want when you want it. The downside to this is that credit companies generally have no control over your spending. They can give you a credit limit, but this limit can actually be 5 times your actual income ¨C hence, you are still prone to over spend. Even if you don¡¯t over spend, you will still need to pay for the interest and other credit card charges which can drastically increase the amount you have to pay.

With debit cards, you get the following advantages:

1. You don’t have to give out personal information at the time of transaction.
2. You don’t need to carry cash or your checkbook.
3. You don’t need to stock up on traveler¡¯s checks or foreign currency when you travel.
4. Debit cards are readily accepted by merchants, especially in stores where credit cards are accepted.
5. Debit cards allow you to dispute unauthorized charges within 60 days. Returning goods or cancelling services is as easy as if you the purchase was made with credit or cash.