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The difference between using a debit and credit cards

January 26, 2015/in Uncategorized /by Hays Lawson

Surprisingly, it does make a difference. The most important thing you need to know is that using a debit card does cannot help improve your credit score. This is because, with a debit card, you are not borrowing money like you would with a credit card. Unlike with a credit card, you don’t get a bill at the end of the month for your debit card, just an itemized statement. As explained in recent article from Money Magazine:

Debit and credit transactions are processed differently: Here’s how MasterCard explained it in an emailed statement to Credit.com: When you use a debit card and your PIN (personal identification number), the transaction is completed in real time, also known as an online transaction — you authorize the purchase with your PIN and the money is immediately transferred from your bank account to the merchant. With a credit card, or using a debit card as credit, it’s an offline transaction.

And of course, because you are borrowing money when you use a credit card and the transactions are not processed immediately, you run the risk of getting overextended or exceeding your limit. That of course leads to trouble. So the next you’re asked, “debit or credit?” give it a moment’s thought, would you please. 
Other things that won’t appear on your credit report include your income, marital status, paid utility bills, and most likely your rental payments. Read about these here on Mint Life.
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