Credit Or Debit? Which Is Better?


In the consumer world, the question posed by the title of today’s blog is regularly asked. The answer, however, changes depending on who you’re speaking with. For credit card proponents, there is a long list of benefits to speak of. Among them is that credit cards often offer purchase protection, extended warranties and the ability to extend payment over time.

Proponents for debit cards often list that last benefit as a negative. Paying for a balance over time leads to interest charges. In many cases, people unable to pay their credit card bills on time incur problems such as late fees and damaged credit scores. Jumping back on the other side of the fence, the ability to build credit (provided that you’re a responsible credit card user) is another benefit of credit card use.

One thing is for sure. If you’re a Canadian merchant, it’s a must you offer Canadian consumers the option of choosing between their credit cards or debit cards to make their purchases. Cash-only is definitely not the way to go! To further that point, let’s highlight a few of the top benefits of both credit card and debit card use.

Credit cards help to build credit histories.

If you’re interest in making any major purchase in your life, such as a home or a car, a strong credit history is necessary. For many Canadians, establishing good credit comes by way of making purchases on credit cards and paying off balances in timely manners.

“Though credit cards sometimes get a bad rap, they’re actually one of the best ways to build healthy credit,” informs John Ganotis on, “Using your credit cards responsibly will help you build a solid credit history and improve your credit scores. That’s in stark opposition to debit cards, which don’t affect your credit history at all.”

Debit cards keep you financially responsible.

With a credit card, a consumer has the ability to spend up to his/her credit limit. Of course, this doesn’t mean the person actually has that much money to spend. It means he/she is being trusted to pay off a balance reaching that limit. Not every cardholder is successful at doing this. With a debit card, however, a consumer can make purchases totalling the amount in his/her bank account. It forces people to spend within a specific budget.

Debit cards make it more difficult to spend money you don’t have, says Ganotis. “And, depending on your spending habits, that could be more important than anything else,” he writes, “If you won’t be responsible with a credit card, a debit card is undoubtedly a smarter choice. Paying sky-high interest, damaging your credit history, and spiraling into uncontrollable credit card debt are certainly not worth the perks.”

Credit cards allow you to earn rewards.

Who doesn’t like getting a little something extra for their purchases? Many credit cards allow their users to earn points that can be put towards future freebies. There are cash back cards that give users small percentages of their purchases back as credits, essentially putting everything they buy on sale. And many other cards offer points or miles that can be redeemed for travel.

Do you accept credit cards and debit cards in your store?

At Canadian POS, we believe there’s no better way to do so than with the revolutionary Poynt Smart Terminal. Call us at 1-877-748-2884 or email us at info@localhost to learn more!

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