Weighing The Advantages Of Both Debit And Credit Cards

In our last blog, we revealed a story about an experience had by one of our colleagues at a local supermarket. Put off by the fact that this store did not accept credit cards – when another store within the same chain did – our colleague was quick to decide to no longer support that location. The conclusion, of course, is that businesses should allow their customers the option of paying with either debit or credit cards in order to truly satisfy them.

But which of the two cards is actually better to use? Readers of the Canadian POS Corporation Blog know that we have been tackling this issue for months. And to be honest, we’ve always come to the same conclusion: business owners shouldn’t care! At the end of the day, it’s imperative that you give your customers the ability to decide for themselves.

On Investopedia.com, however, Mark P. Cussen attempts to answer the question, “Which card is better, debit or credit?” Clearly, there are differences. And Cussen decides to analyze a few of them in order to determine the advantages that each card type provides. Interestingly, by outlining the advantages of each, it only adds strength to the point that both cards should be widely accepted. But let’s take a look at some of his points.

Warranties. Credit card companies often extend the warranties of items purchased on their cards. This gives customers the peace of mind in knowing that their purchases are covered for longer durations of time at no additional cost. Cussen reminds us that customers can take advantage of the fact that items bought on their credit cards have coverage in the event that they become defective after the manufacturer’s warranty has expired.

Advantage: credit cards.

Fees. Cussen writes that “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.” Credit cards, however, often charge annual fees. And even though there are several types of credit cards that don’t, Cussen points out that “over-limit fees, late-payment fees and a plethora of other fees and penalties” are all common for credit card users.

Advantage: debit cards.

Rewards. “Unlike with debit cards, credit card users can reap cash, discounts, travel points and many other perks by using rewards cards,” writes Cussen, “Smart consumers who can pay off their cards in full on time every month can profit substantially by running their monthly purchases and bills through them.” As you may know, rewards points are commonly heralded as the number one reason that shoppers prefer to pay with their credit cards over their debit cards.

Advantage: credit cards.

Controlling spending. “A debit card draws on money the user already has,” Cussen points out, “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.” For those who wish to pay exactly the amount of the item being purchased and no more, debit cards are the way to go. Of course, they could always pay their credit card bills in full and avoid interest charges. But not everybody is that disciplined.

Advantage: debit cards.

Building credit. It should go without saying that building a strong credit score is an important part of everyday living. Big purchases such as cars and homes can’t generally be made without a strong credit score. Credit cards help with that. “Credit card use is also reflected on the customer’s credit report, which allows responsible spenders to raise their scores with a history of timely payments,” says Cussen.

Advantage: credit cards.

Is there really any debate for you? Accept BOTH debit and credit cards! Call Canadian POS Corporation at 1-877-748-2884 to order or upgrade your POS terminal today!