In the current era, there are multiple ways to pay for your bills. People used to pay by coins or cash. But nowadays there are other ways too. Debit cards and credit cards are used by many to pay for utility bills and much more.
Why are debit cards not accepted as much as credit cards?
There are several reasons why debit cards are not accepted as much as credit cards. First of all, people should know that credit cards are much superior to debit cards, and people who don’t earn a monthly salary can not get a credit card in the united states of America. However, the reason why credit cards are frequently accepted than debit cards is stated below.
Active credit history:
Credit history is vital as it saves the merchant and the customers from a lot of arguing. Allow me to explain using an example so that you can fully understand the concept. For instance, if a person goes to buy groceries from the store or carries out shopping for furniture the whole month, the amount is a lot. He will have to record all the payments with himself so that the proof will be available if the consumer causes any problem. Now he has three ways to pay for the products.
The first way is to pay by cash. If the payment I have made in cash, you must keep a signed report with yourself.; the information must consist of the date on which who bought the product and the price. Moreover, it should also be signed by the person providing you products, such as the manager at the grocery store. This way is much more hectic and not safe at all. Bill consists of all information that may use for illegal purposes. Additionally, the bill may also be lost and may not provide proper proof to the person.
The other way is to use debit cards because they are readily available. Now anytime you make a payment, who will use the debit card for paying for the items. Keep in mind that debit cards do not have a back-end history beings stored by the credit card company. So, you are all by yourself again. Most might wonder how people should gather records while using a debit card. It is easy. When you swipe a credit card for payment, a bill is printed on a small white paper. People have to store those bills if the shopkeeper or the store owner objects to any charges.
Moreover, they provide additional benefits to the customers. Customers do not have to note down the date, time, and price manually. They also do not need to sign the bill from the owner. The only problem with debit cards is that it becomes difficult to store so many accounts. If you lose in the bills and the shopkeeper asks for them, it will land you in trouble.
Now, most might wonder about the safest way to note down history. Yes, the use of credit cards. Credit cards function as postpaid payments. It means that when a person uses a credit card for one whole month to purchase items, he will get an entire record. The credit card company notes the prices down, so there is no need to worry.
Moreover, no sign from the merchant is required as the bank handles everything. If the merchant tries to consume money by unfair means, the customer has proof from the bank. He will show the record to the consumer and so there would be no chance of illegal payments.
A benefit for the merchant:
Sometimes the economy is not at its peak, so merchants worry about paying their bills on time. Here is when credit card payments come to use. Most people have credit cards because they are salaried personnel. Additionally, merchant owners promote the use of credit cards for paying bills. There are several reasons for it. The first reason is that the merchant can gain money from it. Allow me to explain using an example so that you may fully understand the whole concept.
Let us take a look at the history of Costco. When who made the first-ever credit card, it made its first mega breakthrough by joining hands with Costco. Yes, I am talking about the infamous American express credit card. They had an extremely beneficial business partnership that lasted for several years. The strategic business p[artnership benefitted three sectors. The first sector was the people. People used to receive tons of cash backs using American Express credit cards at various Costco outlets.
Furthermore, people found it much cheaper than any other credit card on the market. Keep in mind that there were no such credit card companies as visa and MasterCard. As a result, it allowed people to save a lot by shopping from Costco.
The second sector it benefited was the company itself. American express made tons of dollars by partnering with Costco, and they believe it was their base for further success in the future. Moreover, the next sector that benefitted from this partnership was Costco itself. According to America’s business deal, Costco would receive 3 percent of every bill if customers used American express credit cards to buy items.
The same is the case with other merchants. They also benefit from using credit cards. Most of the time, you must have seen that merchants promote credit cards for payments. What could be the reason behind this? There is only one reason behind it, and the reason is that these merchants gain benefits in the form of percentage payments. The different credit card companies have made deals with such merchants.
The deals consist of memory benefits for the merchants. In return, they promote the use of credit cards. Debit cards are not considered to gain any value. The main reason behind it is that debit cards are cheap, and there are no such benefits provided to the merchants. The debit cards have a straightforward functionality. Due to this reason, you must have seen that banks do not offer any such cash backs on credit cards.
As a result, we can conclude by saying that credit cards are accepted more because they benefit merchants and credit card companies.
Most people use debit cards:
Moreover, we can also say that most people do not use debit cards. Most people use credit cards, and there is a valid reason behind it. The first reason is that credit cards are much more convenient than debit cards. There are several ways of describing convenience. The first is that they provide much more cash backs to the customers. So we can say that people use credit cards because they offer benefits in the form of money.
I will explain using an example so that you may have a clear idea about the whole concept. Credit cards offer various cashback. For instance, the chase credit card known as return provides a cashback of 1.5 percent of anything bought. The condition is that the items would be purchased using a credit card. Furthermore, they also offer other benefits such as flying hours. Sometimes premium credit cards can cover almost have the money of your ticket.
Moreover, you may also save a lot using fuel. Credit card companies give multiple deals to their customers in a month. People who use debit cards are not eligible for such benefits because they have a low standard card. Moreover, credit card companies will provide other services such as a gift from retail outlets.
Some credit card companies have contracts with online eCommerce websites. They benefit the customers because the bank is responsible for paying the delivery charges. The delivery charges can account for more than 100 dollars, but credit card owners do not have to worry because credit card companies cover them. Moreover, they also receive tons of gifts from branded retails shops.
Other benefits include the inclusion of proper history.
Credit card companies store over the history of consumption using the credit card. It means that any purchase carried out using the credit card would be noted with the credit card company. Furthermore, the credit card companies act as postpaid. It means that customers do not have to worry about paying for the items each time they buy them. Who can comfortably pay the at the end of the month? These benefits amaze people, and hence most people use credit cards rather than debit cards. Due to this reason, 70 percent of Americans own credit cards, and 33 percent of Americans have more than three credit cards under their name. To conclude this, we can say that people of the united states of America use credit cards, so merchants also accept credit cards. It allows merchants to handle their finances properly.
Credit cards have better security than debit cards:
It is yet another reason why debit cards are not accepted as much as credit cards. In the current era, security is a vast problem face by multiple institutions such as the banks and the government. Most might wonder why I considered only these two organizations. The reason behind it is that these two organizations have the most critical data. The banks consist of the money of in the people, and the government consists of the people’s data. Who can use the data to gain access to the funds for the people? Due to these reasons, security is vital.
Debits cards do not have very high security, and there are thousands of inches in the past that include thieves stealing money from bank accounts. The main problem is that it is difficult to recover this money. The biggest security threat to credit cards and debit cards are online hackers and scanners. Allow me to explain the whole process behind it so that the people may understand. Every person has a unwire number on their credit card. Additionally, every person with having a credit card will have a unique account number. The hacker will get hold of that account number and pin and retrieve money from the bank account.
These hackers use techniques such as phishing and pharming to get hold of sensitive data. You might get scam mail from the bank with all the pertinent data of the bank demanding data. Some people would provide the data through email, and the next day, who will rob them of their money. Here is a tip, do not give any information online. Moreover, you might also receive a fake call from the bank asking for the bank pin and the details, do not provide any details because the bank will never ask for security details.
Suppose the hacker has your bank details. Which card do you think will be easier for money extraction? The debit card, of course. There are different security methods involved in credit card and debit cards. The debit card has only one type of security, and that is the password. When these hackers have your password, it would be straightforward for them to transfer money from your account into theirs.
However, security is much different when we talk about credit cards. One type of security is the PIN. even if the hackers have the PIN; they won’t be able to access the bank account.
Allow me to explain so that you have a clear understanding of the whole concept. Credit cards involve multiple stages of verification. If a person uses his cell phone to transfer funds from one bank to the other, it would be registered according to the bank’s PIN. If the pin is with any other person, they will log in using a different device.
When another device is detected in any other part of the world, the bank would immediately prompt the card owner by a message or by calling him directly. Moreover, the prompt is a warning to change the password pin immediately, but what happens if the owner does not receive the pin. Then credit card app would ask tough personal questions from the person trying to hack the credit card. If the questions are not answered correctly, the app would prevent the person from using the card and block it temporarily.
Furthermore, if a person loses his credit card, it can be easily tracked. Credit cards have a small goldern chip installed in them. The purpose of the chip is to contain sensitive data of the owner and the credit card location. Although who may not determine the live place, who may find the home of last use? Using that address, the credit card can
All these functions and security are not included in debit cards. Due to this reason, credit cards are accepted more than debit cards. Sometimes the outlet won’t even let the person use the debit card for payment.
Credit cards have more limitations than a debit card:
It might also be a reason why credit cards are accepted more than debit cards. Why would a shop owner restrict their customers from buying stuff? Many shop keepers report their customers for purchasing using credit cards only. A time comes when people use their credit cards for shopping only. This promotion of credit cards is because it provides a much higher limit to the users.
Allow me to explain so that you may fully understand the concept. First of all, credit card companies want their customers to spend as much money they want using their credit cards. It is because the more cash pays using credit cards, the more is profit for the banks. Due to this reason, they have kept a very high limit for credit cards.
Furthermore, it also benefits the shopkeepers. Sometimes when a person buys a lot of stuff, he takes nothing along because the debit card limit won’t allow the person to pay for the property. As a result, he takes nothing along. It is a loss for the shopkeeper. As a result, they accept credit cards only to prevent the hustle from not paying for all the stuff. Credit cards have many limits, and people can buy as much stuff they want using credit cards.