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Credit Cards Vs Debit Cards – The Pros and Cons

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Over the years the UK has become a nation that pretty reliant on paying for purchases on plastic, whether debit or credit card, saving us the hassle of having to carry cash around, make countless withdrawals from cash machines, or write out one cheque after another to make purchases.

Paying by card for purchases is a very convenient and easy way to shop, and save you both time and hassle. Paying by card also makes it easy to make purchases online or by phone, both of which have become popular ways to shop for anything from groceries and holidays to clothes, gifts, and more.

When it comes to which card to use for making purchases preferences can differ from one consumer to another, and there are pros and cons to using both debit and credit cards. Both offer ease and convenience, but there are some points to consider when deciding whether you are better off shopping with a credit card or a debit card.

Credit cards

Credit cards enable the consumer to enjoy credit up to a specified limit, and depending on the card can also offer other benefits such as extended interest free periods, purchase protection, rewards points, cash back, and more.

Pros of credit card use

  • Being able to pay for purchases without carrying around cash or writing cheques
  • Being able to shop online or by phone
  • Being able to purchase items and enjoy interest free credit for a specified period
  • Being able to spread the cost of purchases over a long period
  • Being able to enjoy credit up to your specified limit making it easier to buy the things you want without having to wait and save up
  • Being able to benefit from rewards (subject to card used) such as cash back, rewards points, or air miles
  • Great choice of cards to suit most needs and circumstances, including for those with poor credit to help them to rebuild their credit

Cons of credit card use

  • The risk of getting into high levels of debt that becomes unmanageable
  • Risk of credit card fraud
  • Being charged often high interest rates on balances that are not paid in full each month

Debit cards

Debit cards are usually issued by your bank, and these enable you to enjoy the convenience and ease of using plastic to pay for purchases, but you must have the necessary funds already in your account before you can spend on your debit card. You can enjoy some benefits with your debit card such as extended purchase protection and emergency card replacement, although you should check the terms attached to your particular bank in order to see exactly what sort of benefits you have.

Pros of debit card use

  • No risk of getting into debt, as you have to have the money in your account in order to use the card
  • Ease and convenience of paying by card without the need for cash or cheques
  • Being able to shop online or by phone
  • Extended warranty on purchases with many debit cards

Cons of debit card use

  • No credit facility so you cannot spend unless you already have the funds
  • Risk of debit card fraud
  • No facility to spread repayments on purchases
  • No additional benefits such as rewards or cash back
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Downward DOGE: Descending Dogecoin Pattern Predicts Deadly Drop

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dogecoin downward dog

Dogecoin has had a dramatic year. Starting only one year ago, DOGEUSD passed the one cent mark and embarked on a meme-fueled moon mission toward $1.

It never quite got there, and has been in a downtrend ever since. The downtrend has also since taken a walk down a dangerous path, putting the altcoin in jeopardy of another deadly drop. Here is what could be in store for Dogecoin in the days ahead.

Crypto House Training: Good DOGE, Bad Behaviors

There are two sides to every coin, and even a good dog can behave badly at times. Dogecoin was last year’s cryptocurrency all-star, rising from under a penny to nearly $1. It even managed to crack into the top five cryptocurrencies by market cap. It also caused a whirlwind of imitators.

Fans of the popular pup-based coin range from Snoop Dogg to the Dogefather himself, Elon Musk. These celebrity figures and the masses of the mainstream rode the Dogecoin rocket to success. Robinhood investors rejoiced; meme-coins went viral on TikTok.

Related Reading | Recapping 2021 Memecoin Mania: Dogecoin, Shiba Inu, & More

The ride itself has been rather bumpy as of late due to the increasingly risky macro environment. However, a possible chart pattern might suggest that it is time to abandon ship and send your DOGE back to the pound (or the dollar).

Is this a descending triangle in Dogecoin? | Source: DOGEUSD on TradingView.com

The Dangerous Descending Triangle In Dogecoin

Dogecoin is exhibiting a possible descending triangle chart pattern, pictured above. For comparison, the primary phase of the Bitcoin bear market is depicted side by side with DOGEUSD. A similar-sized drop would take Dogecoin back to around between five to ten cents per coin or lower.

Descending triangles have a bearish tendency to break down below support, but that doesn’t necessarily mean certain doom for DOGE.

Related Reading | SpaceX Dogecoin-Funded DOGE-1 Mission Set To Launch In Q1 2022

In the comparison, Bitcoin fell another 50% to its eventual bear market bottom. After the final breakdown of the triangle, the bottom was in and the cycle began anew.

While things could turn worse for Dogecoin investors – especially those who bought near the peak – it might also not be very long until the market reverses if the range lower can be defended.

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

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70% Of Bitcoin Supply Is In Profit – Why Bulls Need To Defend This Level

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70% Of Bitcoin Supply Is In Profit - Why Bulls Need To Defend This Level

On-chain data shows about 70% of the total Bitcoin supply is currently in profit, a level that has historically been important for bulls.

Around 30% Of Total Bitcoin Supply Is Now Underwater

As per the latest weekly report from Glassnode, the percentage of BTC supply in profit has now fallen off to just 70%.

The “percent of supply in profit” is an indicator that measures the percentage of the total Bitcoin supply that’s currently in the green.

When the value of this metric increases, it means more coins have started to get into profit. This leads to holders becoming more probable to sell their coins in order to harvest their gains.

At very high values of the indicator (more than 95%), the price of Bitcoin has usually approached a top as profits are realized.

On the other hand, when the metric moves down, it means more coins are entering into the red. Below certain low levels, investors may capitulate to cut their losses. However, when more than 50% of the supply is underwater, bottoms have historically formed.

Related Reading | Green Energy: In NY, Bitcoin Mining Saved The Oldest Working Hydroelectric Plant

Now, here is a chart that shows the trend in the value of the Bitcoin supply in profit over the last couple of years:

Looks like the value of the indicator has declined recently | Source: The Glassnode Week Onchain - Week 3, 2022

As you can see in the above graph, the metric has been falling down since a few months now. And so at the moment, only around 70% of the Bitcoin supply is in profit.

Related Reading | Bitcoin Miners Show Strong Accumulation As Their Inventories Spike Up

The 70% level seems to have been significant historically as bulls had to defend it twice in the past two years. The first instance was shortly after the COVID crash, between May 2020 to July 2020.

The other instance was 2021’s mini-bear period between May and July. The bulls came out on top during both the periods after a while of sideways movement.

The report notes that the medium-term outlook of the price likely depends on how the market responds to the level this time. If more of the supply enters underwater, those in the red may finally capitulate.

On the other hand, a bullish reversal can bring more Bitcoin into profit and prevent these holders from selling here.

BTC Price

At the time of writing, Bitcoin’s price floats around $42k, up 0.5% in the last seven days. Over the past month, the crypto has lost 8% in value.

The below chart shows the trend in the price of BTC over the last five days.

Bitcoin Price Chart

BTC's price has once again stumbled down in the past few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com
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The NFT Investor’s Worst Nightmare: IRS Craves For A Crackdown

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NFT

Last year, when the NFT Everydays: The First 5,000 Days by Beeple sold at Christie’s for $69.3 million, it catapulted the non-fungible token’s market into the mainstream. A large number of people have invested billions in this industry and the boom is not stopping.

Recently, NewsBTC reported an aggressive surge in the NFT trading volume this year despite the falling crypto market. A report by Dappradar showed that in the first ten days of January, NFT trading generated around $11.9 billion.

Our previous report quotes Mason Nystrom, a senior research analyst at Messari, who alleged that “The cryptomarkets are fairly correlated – the market tends to rise and fall with Bitcoin. This has made it surprisingly interesting over the recent downturn as the NFT market has continued to increase in volumes.”

However, the rapid rise of the NFT space has not moved the officials of the Internal Revenue Service (IRS) to shed some light on the taxation parameters for the assets.

Even taxation experts are confused on the matter and can only speculate about the possible outcomes. As a large share of NFT traffic comes from the younger generations, are users prepared for tax filing season? The IRS is gazing at future penalties.

Related Reading | January Proves Turbulent For Investors But NFT And GameFi Seems To Be Eating Good

The IRS Gears Up

In November 2021, the $1.2 trillion infrastructure bill was signed into law by President Joe Biden as a key part of his economic agenda, proposing large investments in the country’s infrastructure. The funding is to come from a few sources involving tax changes.

Watching over the cryptocurrency industry’s boom, the infrastructure bill directly targets its investors, but they fail to educate digital assets users on all the information they need to report. The unawareness could result in possible felony convictions for tax evasion.

However, the law updates the definition of the terms “broker” and “digital assets”, and clarifies that users with regular transactions or any crypto transaction over $10,000 must report that data to the IRS. In this case, taxation works for digital assets in a similar way it does for capital gains relative to stock and bond trades.

However, non-fungible tokens are not close to being as clearly defined by the law as other digital assets, so there is a lot of room left for interpretation. That’s a dangerous game for investors, but the IRS investigators seem eager for cases to surge soon and are ready to crackdown on the market. They might see billions of dollars coming from the NFT gains tax bills.

Are NFT Investors Evading Taxes?

The murky confusion originates because it is not clear whether NFTs are taxable as art collectibles or not. It is fundamental to be aware of this because most crypto assets and stocks have a long-term capital-gains rate up to 20%, but for art collectibles, it’s 28%. And if NFTs are to be considered as ordinary income, the rate could go as high as 37%.

Michael Desmond, the former chief counsel at the IRS who is now a partner at Gibson, Dunn & Crutcher, commented for Bloomberg that the rising NFT trading traffic might force the IRS to clarify the rules, “but it may begin auditing people first.”

The best-case scenario is gearing up and going through large amounts of paperwork, like the NFT investor Adam Hollander did, spending 50 hours checking months’ worth of transactions. He stated that “It’s an absolute nightmare,” and added that “There are people who aren’t going to be willing to do what I’m doing.”

And that nightmare really is the best-case scenario compared to tax evasion penalties.

Related Reading | Sports NFT Marketplace Lympo Suffers An $18.7 Million Hack

Total crypto market cap at $1,9 trillion in the daily chart | Source: TradingView.com
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