Here’s why credit cards are preferable to debit cards: If you use a credit card, you have certain rights that you do not have if you pay by cash, check, or debit card. This does not mean you should charge everything on a high-interest credit card; however, it can be good to use your credit card judiciously with proper planning.
If you do not have any outstanding debts and just want a card that you plan to pay off in full without ever having to make an interest payment, a credit card is a smart choice. This way you get all the benefits the card offers, as well as the protections guaranteed under the Consumer Credit Act, outlined in Section 75. If you use a credit card, you are entering into a borrowing arrangement, regardless of the fact that you may pay your credit cards off completely every month. When you enter this arrangement, you get certain rights. Remember that you do not get these rights if you use a debit card.
Need to borrow money to tide you over? What’s the best way to get it – a bank loan or cash from the credit card? You’d think it was obvious, right? But as you’ll soon discover, the obvious choice is not always what you’d expect.
Personal loans let you borrow up to £25,000; the key sell being you get “structured repayments” so you know how long you’re borrowing for and what it’ll cost each month. Yet in general, borrowing on the cheapest credit cards substantially undercuts the cheapest loans; meaning in many circumstances they should be used first.
· Are you trying to make existing credit card debts cheaper?
In most cases a loan won’t be cheapest for you. Credit card balance transfer deals are designed to allow you to shift other cards’ debts to them at a special cheap rate, usually much cheaper than the best loan rates.
