The Ultimate Cash, Credit or Debit Shopping Quiz

Credit cards and debit cards are referred to as plastic money. They are cards made of plastic with which you can make purchases on the spot.

The first universal credit card was introduced in 1950. Offered by Diner’s Club in the US, it was accepted at a variety of stores and business establishments.

The biggest advantage of a debit card over a credit card is that you don't have to be concerned with interest or monthly bills, as the debit card uses only the money you have in the bank.

A banking consultant and information technology (IT) professional, Tony Howlett wrote the book entitled Open Source Security Tools.

Although he admits that his theory is rather outrageous, Howlett says that cash will die a natural death, as we will give it up for more convenient ways to make purchases.

It is more convenient to pay with one plastic card than to carry around a lot of cash.

Paying in cash renders the buyer completely anonymous, a debit or credit card can be tracked easily.

In 2006 there were more than 984 million credit and debit card accounts in the US, as this number of cards were issued by just Visa and MasterCard.

Credit cards and debit cards provide proof of ownership because your name printed on the front of the card and your signature is on the back. Some may have your photo as well.

According to the Fair Credit Billing Act in the US, the owner of a lost or stolen credit card has to pay up to $50 worth of any purchases made by the perpetrator.

According to the Electronic Fund Transfer Act, if a debit card is lost or stolen, the cardholder is liable for $50 as long as he or she informs the bank within two days of discovery. After that, his/her responsibility increases to $500.

A PIN is a personal identification number, which most banks offer on their debit cards

Since most debit cards have with personal identification numbers that only the cardholder knows, a thief would not be able to use the card. That makes it more secure than a credit card, on which a thief can have a field day racking up purchases.

Credit card companies make their money by charging interest on the cardholders’ balance each month which, due to people’s tendency to defer payment, adds up to quite a bundle.

According to US News and World Report, a credit card user in the US owes an average of $16,635 to his or her credit card company.

While most banks in the US do not charge clients for a debit card account, they may charge an overdraft fee of about $35. For the banking industry, this adds up to a tidy $17.5 billion a year.

Debit cards are the most effective way to pay. They are secure and do not incur any charges, as long as you don’t go into overdraft.

According to studies of shopping behavior, people who pay in cash are more cautious about what they spend their money on and don’t make purchases as blithely as they do with credit or debit cards.

The pain of paying refers to the immediate sense of loss you feel when you pay in cash and watch your money slip through your fingers. With plastic money, that feeling is not aroused because you don’t actually see the dollars being taken from you. What’s more, the payment is deferred until the bills come in.

The major problem with using cash is that if it’s lost or stolen, your money is gone with the wind. With a credit or debit card, even if it is lost or stolen, your money is much more secure.