EFTPOS Or Debit/Credit Cards – Which Should You Use?

March 16th, 2011

A lot of consumers try to compare EFTPOS and debit/credit cards only to find themselves more  confused then they were when they started.

Prior to the debt and credit crisis, everyone just used their credit cards and did not think much of it. However, now that the banks are being forced to disclose and limit their fees many consumers are taking another look at the option of using a different mode of payment.

Why Should You Use Debt Cards Or EFTPOS?

The big reason to use debit cards or EFTPOS is that you are spending your own money. When you do that, you never have to worry that you will wind up in debt because you are not taking out that short term loan from the card company. This makes these cards more appealing for the consumer who wants to avoid debt and the one who has a bumpy credit file. Since you do not need a perfect score to get this plastic, it is more available to people who want the convenience of credit but lack the ability to get

The big benefit of a debit card is that it works just like a standard credit card and even carries the Visa or MasterCard logo. That means that it can be used when you travel abroad or to make on line purchases. Many of them even come with the same security protections you expect from a standard card, which adds to their appeal. The drawback is that sometimes added fees apply to using these cards. They are also easier to be used fraudulently which opens you up to added risk for identity theft.

The EFTPOS is a good spending option, but it only works here in Australia. When you travel abroad, you will not be able to use this form of payment. You will also not be able to use it to purchase items on the web, which can be quite frustrating. More importantly, there is little security with EFTPOS so if your card is skimmed, you may have no recourse to get a refund.

Your best bet is probably to have credit cards of various types available to you. This might mean carrying an EFTPOS around for use here at home and a credit or debit card for when you travel outside of Australia or for making online purchases.

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	Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
HSBC Credit Card	17.99%	0% for 8 months with 2% handling fee	$0	21.99%
Virgin No Annual Fee Credit Card	18.99%	2.9% for 6 months	$0	20.99%
Bankwest Zero MasterCard	0% for 6 months (reverts to 17.99% )	4.99% for 9 months	$0	18.99%