Monday, July 2, 2007

When Using a Credit Card is Better Than Debit Cards

If you are traveling this 4th of July week (for those of you in the U.S.), chances you will be taking a credit card, debit card, or a few of both with you. There are a few reasons why traveling, credit cards are superior to debit cards:

  1. Temporary Charge Authorization: When you make swipe your card at the pump or make other purchases with your debit card the merchant will make a temporary charge for $1, $20, or even $50. The company then charges your account for the amount in full when the transaction has been completed and cancels the initial transaction. The problem is that the initial transaction can take up to 48 hours to disappear from your account and may end up over drafting your account.

  2. Car Rentals: Simply, many car rental companies won't let you rent a car with a debit card, although I think this is beginning to change.

  3. Disputed Transactions: Some debit cards do not offer the purchase protections that credit cards do that allow you to run to Visa or Mastercard to take care of problems if the merchant won't. However, this fact has been widely publicized and as a result Visa and Mastercard have both make a marketing push to let people know that this is changing.
Which to Use @ MarketWatch
Picture - Flickr Selvin