Debit or Credit?

As a person that has been a retail manager for a about 10 years I can fully tell you that most companies will not want you to use your cards and try to get you to do debit if you do. This is for several reasons and most of these reasons are because they make more money this way. When you use your credit card it costs them more money than it does when you use your debit card and it costs them an even more money than when you use cash to handle these purchases. When you use cash it costs them not a cent in processing of your purchase but when you use a debit card it can cost them an average of 1%-5% depending on who the card is going through for a bank. When you use your credit card it can be anywhere from 3-12% of the total card charge just to swipe that card.

We don't realize it, but that swiping of the credit card can save you if you are careful and watchful of it. I am not saying to go rack up money on your credit card because it will save you money! But, when you use the right cards and do it right you can save a lot. I advise people to use a credit card that can be paid off within a month and not get charged for interest. Check and see if you get any discounts, points, or cash back on your purchase. Here is a few examples:

• When you use a card that gets discounts you may be able to save 1-15% at certain stores. If you check on your cards and see that you get a discount at a store and use that card you could save money. Let's say that you go to store X and spend $100 each time you go to it but you can go to store Y and save 10%, then you go to store Y and spend $100 you walk out only spending $90. If this is for groceries or gas and you do this on a weekly basis then you could possible get a savings of $520 a year ($100-$90=$10*52=$520). HUGE!!! Especially if you shop around and check out the stores they work with.

• Points and frequent flyer miles are a popular decision making area for people when they are credit card shopping. If you fly around a lot or use your card a lot for business and what not then this can be a huge thing for you. Take Visa, they tend to give points if you sign up for it online through them or your bank. You can get points for every $100 you spend and if you spend a lot then you can easily get a free vacation (or like I did got books from Barnes and Noble) or you could get fly miles to go on your next business trip. Only really good if you use your card a lot. If you can pay your rent or mortgage by using your card then do that because I racked up points very quickly by doing this.

• Cash back is something that some cards do that can save you some money. They will sometimes give you cash back on every swipe. If you shop at different places and don't know how much you spend then this is the way to go. You can save cents that add up every time you go fill up your tank. Lets say you save $.10 cents per week on gas then $10 on groceries, $10 on eating out for the month, mortgage payment and etc....as you can see it can add up quickly here and there over the months possibly saving you thousands.

I am completely against using cards except for this reason. It does not save you any money if you let your balance roll over every month or pay your minimums. Take your time and choose the right type of credit card for you and budget wisely so that you can pay them off before the interest starts accruing on them. Remember every cent counts in today s financial state!