(WXYZ) — Debit card, credit card, debit card? Do you go back and forth trying to figure out which one to use?
If you’re struggling to save money, you’re a part of a growing club. The National Foundation for Credit Counseling says 32% of Americans don’t have money for short term savings.
Before thinking about where to cut in your budget, you may want first to think about which card you use when you shop.
Explains why the plastic you use matters….so you Don’t Waste Your Money!
Well this next expert says if you’re trying to save money, there’s a difference in using one piece of plastic over the other.
Many shoppers these days like Emily Pierce says credit is her go-to plastic.
It does have its benefit, but it also has its drawbacks.
“If I use a credit card I definitely spend more, I think about buy it now, pay it later,” Pierce said.
According to research by ValuePenguin.com , shoppers are willing to spend more --- as much as 83 percent in some cases-- when paying with credit over cash.
University of Michigan Business Professor Scott Rick says evidence shows that just seeing credit logos, can encourages you to spend more.
“People will compare a purchase to their credit limit versus comparing it to how much cash they have in their wallet,” said Rick. “There’s a craving response that goes along with it.”
Now, keep in mind, credit has its advantages. Incredible fraud protections, the chance to earn airline miles, cash back rewards or build credit for big purchases in the future.
“If you can manage it wisely, it has all these spillover benefits down the road,” adds Rick.
Consumers who use credit tend to focus on the products benefits as opposed to their costs and that can leave you severely debt.
Experts say that’s reason enough, to keep it simple.
If cash isn't your thing, and you’re on a budget, experts say debit cards are the surest way to ensure you don’t overspend.
Debit is useful with smaller, every day purchases because it forces you to actually feel what you’re spending.
Credit should be used when you’re making larger purchases, such as with electronics because the credit card company often offers warranty protection.
Here’s another tip to save! Think about using your credit card like a debit card. Buy what you need but make a habit of paying it off the next day immediately, that way you get the benefits of the rewards, while making sure you never going into debt.