Choosing between whether to use a debit card and credit card can be tough, as both have their distinct advantages and disadvantages. Here's our guide to learn their pros and cons that can help you maximize benefits, minimize potential drawbacks, and decide which card to use for different types of purchases.
The Debit Card
Just like a regular ATM card, you can use debit cards to withdraw cash from most ATMs. The major difference between an ATM card and a debit card is the issuing company logo on the card, such as Visa® or Mastercard®. This allows you to use debit cards wherever Visa® or Mastercard® credit and debit cards are accepted for payment. Unlike a credit card, however, it takes money straight from your account at the date of purchase.
Pros of using a debit card
- Annual fees for debit cards are generally cheaper compared to credit cards, if any fees are charged at all. The only fees or penalties generally associated with debit cards are fees for going below the minimum maintaining balance of your account. (Read: How to Open a Bank Account in the Philippines)
- Debit cards have the same convenience as credit cards in terms of going cashless in multiple stores.
- Unlike credit cards, it’s easier to manage and keep track of personal finances because debit cards only allow you to spend money that you have in your account.
Cons of using a debit card
- You are limited to what you have in your bank account. While it’s an advantage for people who are still trying to get a hold on their finances, this also means inaccessibility to immediate funds payable at a later date in case of emergencies.
- Unlike with credit cards, you don’t generally have the option to pay in installments. This means big-ticket purchases like appliances and vehicles are trickier because you need full amounts in your bank account to be able to swipe for them.
The Credit Card
Credit cards allow you to purchase items through borrowed funds from a bank and pay for them at a later date.
Like debit cards, you can use credit cards to purchase items anywhere that is available for the issuing company, such as Visa® or Mastercard®.
Pros of using a credit card
- Most credit cards have features like rewards and rebates. This means, depending on your credit card type, you can get freebies, points, travel miles, bonuses, or cashback every time you use your card.
- In addition to rewards and rebates, issuing banks of credit cards would have exclusive promos for flights, accommodations, birthday privileges
- You can pay for items on installments of 3 to 24 months, depending on the available promos.
- Credit cards allow you to swipe for goods and services or withdraw money on credit in case of emergency situations.
Cons of using a credit card
- It's easy to get carried away with spending. If you don’t keep track of your expenses diligently, you can have financial troubles due to compounding late fees and interest
- Apart from the usual penalties, most credit cards also have annual fees
- It’s much harder to get a credit card than it is to get a debit card in the Philippines. You would need to present valid IDs and proof of annual income
Pay your credit card bill online with Coins.ph
If you want to maintain good credit standing and avoid paying high fees, you need to be always up-to-date with your credit card payments.
Pay for your credit card bill anytime and anywhere with your Coins.ph app. As long as you have funds in your Coins.ph wallet, you can pay for your credit card bills, utilities, and more straight from your phone. No lines, no waiting, and no hand-cramping forms to fill.
