Plastic money or cards be it credit or debit are among the most preferred modes of payment after cash. Over the last few years, there has been a substantial increase in the usage of both types of cards to pay for products and services. Although the debit card has no debt liability, credit card debt is something users need to manage while using for payments.
Offered in a range of colors and patterns, they have replaced checkbooks that were widely used a few decades ago. Although both look similar and are used for the same purpose, they are different from one another. Let’s look at the main differences.
Differences Between Debit and Credit Cards
Using a debit card draws money from your bank account meaning whenever you swipe, you agree to spend money from your bank account. Thus, it means that you are using your own money to make payments. On the other hand, credit cards allow you to use credit card debt that you are responsible for paying back in the future. Credit cards are popular and as per Experian’s credit report, an average American has 3 credit cards.
Managing your credit card debt helps in building your credit profile over time. But the term responsibly often leads to financial troubles which means you end up paying more than you would have paid outright. As you spend money that isn’t from your set funds in your bank account, you are often tempted to spend money that you don’t have. U.S. Federal Reserve in 2018 released data that showed credit card payments surpassed debit card payments by over 30%. The surprising fact here was that debit cards were used twice as much as credit cards were used.
Bankruptcy Might Offer A Way Out Of Credit Card Debt
Although convenient at times, uncontrolled spending might build a mountain of debt on you. You may start feeling trapped under debt because of high interest rates and fees. If you are presently overwhelmed with credit card debt, it can be a time to start over. Bankruptcy is often a step towards starting afresh and getting financial relief for some borrowers.
Additionally, it puts an immediate end to harassing calls and summons by creditors. Bankruptcy helps in eliminating credit card debt and restructuring it into manageable repayments. Most of us may have heard about bankruptcy but not all of us are aware of making its best use to start fresh. Only financial experts who have the knowledge and experience can guide you deal with the conditions efficiently.
If you are facing such a scenario and looking for recovering from the stress of repayment, then you should be consulting Weller Legal Group. They are professional financial managers in Tampa, Lakeland, Port Richey, and Clearwater, FL. Besides helping you deal with and restructure your credit card debts; they also offer financial advice that can help you manage your credits. They also guide clients to improve their credit scores and build better credit with proper management of their financial transactions.
Picture Credit: Crello