Wallet Wars: Which Credit Card Deserves Your Cash? |

Your favorite payment options go head to head in the fight we had to call Wallet Wars 2010.

Charge card, credit card, or debit card: which card deserves your cash? We break down the benefits of each kind of consumer credit so that you can make an informed choice.

Charge cards are much like credit cards however they require you to pay off the full balance every month. Debt doesn’t build up; however, if you fail to pay off the balance, the penalty is heavy. American Express is the only major issuer to offer charge cards.

Since you have to pay it off every month you won’t rack up charges and procrastinate payments. Debt won’t have a chance to linger and gather interest like a snowball.

Charge cards usually have significantly higher credit limits or no limit at all.

American Express charge cards offer great incentives and rewards including double points, free companion airline tickets for big accounts, hotel upgrades, and free memberships in “elite” travel programs.

American Express has tools that make it very easy to track spending, including very detailed expense records that allow tracking by spending category.

Credit card–Make purchases on credit, and carry your unpaid balance and accumulating interest forward each month. However by only paying minimum monthly amounts you’ll end up paying many times more than the initial charge amount.

In an emergency like a car breakdown or hospital visit, having a credit card could be useful.

By paying back your monthly balance in a timely fashion, you can build good credit.

Most credit card companies do not charge monthly fees (aside from interest) like charge cards typically do.

Credit cards typically have better theft protection than debit cards. With many debit cards you have two days to report misuse or you could be on the hook for up to $500!

Debit cards–instead of buying on credit, a debit card withdraws money directly from your account. It’s a great way to make sure you are living within your budget, but offers poor theft and fraud protection. Also, using debit cards won’t build your credit.

Debit cards force you to live within your budget. Since you aren’t buying on credit you can’t be crushed by the boulder of credit debt.

Accepted almost everywhere a credit card is accepted.

It’s easy to get cash back when you make a purchase with most retailers.

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