Credit cards have, over the course of several decades, become the preferred method of payment for individuals across the Untied States and even the entire world because they are easy to use, convenient, relatively simple to obtain, and they can allow for purchases that would otherwise be unaffordable. In most cases, credit cards are beneficial and a true asset to the economy. The most common problems of credit cards are that people charge much more than they can afford, and become severely in debt.

A alternative for individuals who either have bad credit or who do not want to own the responsibility that comes along with a credit card are prepaid charge cards or debit cards. The basic concept behind a prepaid charge card is that it does not allow a person to spend money they do not have, while still providing the convenience of the small, rectangular piece of plastic that is so much more convenient than cash. Debit cards may or may not have fees associated with them, and the terms and conditions associated with debit cards will vary depending on a person’s bank. Often, banks offer good deals on debit cards if a person agrees to have his or her regular payroll check directly deposited into their checking or savings account on a bi-weekly or monthly basis.

So how do you select between using credit cards and debit cards?

You would start out by comparing the fees each type of card charges.

Then compare the security that both cards offer by finding out the answers to the following questions:

What happens if I want to file a charge back?
What if my credit card is stolen?
What if my credit card is used by a non authorized person?
What is my liability limit for fraudulent purchases?

Once you have the answers you will also want to consider the reward programs that the cards offer.