Credit Cards VS. Debit Cards: The Battle Rages On

As we creep closer and closer to Christmas, retailers from all over Canada are enjoying the last few days of the always-busy holiday shopping season. For the most part, Canadian retailers are able to enjoy all of those extra sales because they allow holiday shoppers to pay for their purchases using the payment methods of their choice.

What is the most popular payment method in Canada?

Well, the debate rages on about the true answer to that question. Quite often, we hear that it’s debit cards. Debit cards, in fact, are known to be more popular in Canada than any other country in the world. Perhaps, it’s because Interac is a Canadian brand and, as Canadians, we’re just so proud of the innovation that we support it intensely.

Or maybe it’s because, as Alicia Adamczyk pointed out on Lifehacker.com last week, they are incredibly well-liked by young people. “Nearly 70% of millennials prefer debit to credit cards, according to a 2015 report from Chime, and Transunion reports they have fewer bank-issued and private label cards than older generations,” she informs.

What are the pros of using debit cards?

As with everything, there are pros and cons. Adamczyk notes, however, that the pros to using debit cards are many. And they include benefits that extend beyond the ability make purchases. She highlights the fact that when debit cards are used to make purchases, the money is taken out automatically from the bank accounts of their users. That way, “it can make day-to-day spending more transparent.”

However, Adamczyk also mentions that debit cards enable users to set up automatic transfers to their savings accounts and withdraw cash from ATMs or other vendors. She also lists a particularly interesting benefit of debit card use. It’s one that tends to make it a favoured payment method over credit cards. “Spending doesn’t affect your credit score,” she writes.

What are the pros of using credit cards?

There’s no doubt that credit card use is extremely popular. And that’s because there are numerous benefits that come with choosing them as payment options. Not only can you extend payment on the balances that you accrue on a credit card, but you can earn reward points for each dollar you spend. Rewards, in fact, top Adamczyk’s list of credit card pros.

She also points out that they are more secure than debit cards, especially for online shopping. It’s also easier to get your money back if your credit card is compromised. However, the fact that credit card use can help to build your credit score is listed as one of the most beneficial pros.

Credit cards “can be used to build up credit score to help with borrowing,” writes Adamczyk, “Your payment history is the most important component of your FICO score (it accounts for 35%), but the length of your credit history (i.e. how long you’ve had a card) is also considered. This can save you thousands of dollars in lower interest rates when you’re borrowing for a house or car over the course of your life.”

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

If not, the time to begin is now! If so, why not go for an upgrade? Contact Canadian POS Corporation and ask us about our Countertop and Wireless POS options. Give us a call at 1-877-748-2884 or email us at info@localhost.