Credit Card Rewards Outshine Debit Card Rewards?
Credit Cards Less Popular than Debit Cards
According to Visa Inc., it was back in the last quarter of 2008 that the total dollar volume spent on its branded debit cards first exceeded that spent on its credit cards. Does that mean that a tipping point has been reached, and that from now on it’ll be downhill all the way for credit card use?
Credit Card Debt Hangover
Well, maybe. It’s certainly true that, during the recent recession, many Americans were seriously spooked by their exposure to credit card debt, and resolved never to leave themselves so vulnerable again. So it may be some time before the country sees the sorts of high levels of credit card debt that existed a few years ago.
But it’s much too soon to consign credit card use to history. Because credit cards can do things–valuable things–that debit cards simply can’t.
Credit Cards and Debit Cards: Some Differences
Everyone knows that debit cards deduct money straight from your bank account while credit cards give you an opportunity to spread payments. However, in addition, credit cards usually offer better legal protections against card theft and fraud, including identity fraud. They also make it much easier to rent cars and reserve hotel rooms.
Credit Card Rewards Rock
But–also very importantly–credit card rewards programs are usually much, much better than those (if any) offered with debit cards. Monday’s New York Times had a feature on debit card rewards that showed just how miserly they can be.
For example, those who belong to the Chase Extras program, but choose not to pay an annual fee, receive one point for every $5 they make in signature purchases. The Times says that such a cardholder would have to spend $25,000 in order to earn a $50 Macy’s gift card.
Not Just Chase
It’s not just Chase whose credit card rewards program outperforms its debit card scheme. It’s pretty much universal.
Credit Card Deals Too Good to Die
There’s not much doubt but that the once-passionate love affair that consumers for years carried on with their credit cards has faded recently. But as long as credit card use continues to offer real advantages, Americans will still include them in their wallets.
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