The Ten Commandments of Card Usage

Knowing when to use credit cards and debit cards is an important life skill few people have. Here’s how you can acquire it.

With debit cards, you spend your own money, plain and simple. With credit cards you borrow from a lender and get charged interest for every transaction. It may seem simple but if choosing between debit and credit cards is the difference between financial freedom and crushing debt.

Even though it’s easy to apply for credit cards in UAE Personal finance experts try to prevent us from using credit cards because many of us use them irresponsibly and end up in debt. However, contrary to popular belief, if you can use the plastic responsibly, you’re actually much better off paying with credit cards than with a debit card and keeping cash transactions to a minimum. Read on to know when to use which kind of plastic.

The 10 Card Commandments

Match the card to the goal.

• To avoid debt and paying monthly bills that cut into your earnings, use a debit card.

• To earn rewards for your everyday spending and take advantage of opportunities to lower costs by earning points, miles or cash back apply for a credit card with these features.

• To manage your spending, use a debit card.

• Hotels and rental car agencies will roll out the red carpet for your credit cards in UAE, this is both a good thing and a bad thing, choose wisely.

• Never purchase with your credit cards what you cannot afford with cash.

• Don’t opt-in to overdrafts on your debit card. When your account is empty, let your card be declined.

• Use your debit card if you think you might spend more than you can afford to pay back when the bill arrives.

• If you do use a debit card, choose one that has the Visa or MasterCard logo on it. That may give you extra protection or benefits.

• Find credit cards with offers.

If you already know how to use credit cards responsibly, apply for a credit card, and don’t use your debit card for anything other than ATM access. If you do, the combination of rewards, buyer protection, and the value of cash-in-hand will let you breathe a little easy when it comes to personal finances.