Readers of the Canadian POS Corporation Blog know all-too-well the benefits of accepting credit cards and debit cards. It has been proven time and time again, by Canadian shoppers, that plastic-friendly establishments are favoured over the cash-only variety. It has become more and more noticeable with each passing year that we are growing into a cashless society. And, as a business owner, it’s important to know why.
Your customers love paying with plastic because it provides them with options and benefits that cash can’t provide. As we’ve pointed out in many past blogs, such benefits as rewards points, travel insurance and payment flexibility coax Canadian shoppers to pull out their credit cards instead of cash. However, there are many Canadians who prefer using their debit cards. Paying with their own money instead of credit is wiser choice, some feel.
On Investopedia.com, Mark P. Cussen discusses the differences between the two card types. “Debit cards allow bank customers to spend money that they have by drawing on funds that they deposited with the card provider,” he explains, “Credit cards allow consumers to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.”
But is one better than the other? This is a question that has been posed on our blog before. But it is also one that is asked by consumers on a daily basis. Which of the two types of cards has more benefits than the other? In our experience, it all comes down to preference and how a person decides to use his or her card of choice. Nevertheless, Cussen breaks down the advantages that each card has over each other. In today’s blog, we’ll explore debit card advantages:
Minimal or no fees. If you’re not looking to pay anything more than the price of the item you’re purchasing, it’s best you go with debit cards. Doing so will ensure that you avoid interest charges on balances that you may not be able to pay off in full. This is exactly the reasoning used by Interac in their advertising for their cards. Their “Be In The Black” campaign strongly advocates for shoppers to use their own money.
“Frugal consumers prefer to use debit cards because they usually have few or no fees of any kind, unless users spend more than they have in their account and incur an overdraft fee,” writes Cussen, “By contrast, credit cards generally charge annual fees, over-limit fees, late-payment fees and a plethora of other fees and penalties, in addition to monthly interest on the card\’s outstanding balance.”
Controlled spending. “A debit card draws on money the user already has,” Cussen continues, “Compulsive spenders would do well do use debit cards and avoid the temptation of credit; retailers know people usually spend more using credit cards than if they were paying cash. Interest and other charges paid by those who don\’t pay off their balances fund many of the user benefits people get from credit card companies.”
As a business owner, the above mentioned information is important to know. Providing your customers with the option to choose between their credit cards and debit cards will help you generate more sales. Of course, cash will always be an option. But it is one that Canadian shoppers are choosing less and less. To accept plastic using the best POS terminals in the industry, call Canadian POS Corporation at 1-877-748-2884 or email us at info@localhost.