I almost never use a debit card anymore. I love using my credit cards because they offer me a number of advantages over debit cards. Of course, if you decide to use credit cards instead of debit cards, you do need to be careful; you don’t want to end up in debt.
If you have the discipline to stay out of debt when using credit cards, here are 3 reasons to use them instead of debit cards:
Your Money Isn’t At Risk
First of all, it’s not your money that’s at risk. There are a number of ways to protect your credit card or debit card number from scammers and fraudsters, but the reality is that nothing is full-proof. There is still a chance that your identity will be stolen and fraudulent purchases will be made.
When you use a credit card, the money at risk isn’t actually yours. Instead, it’s the credit card issuer’s money at risk. This means that if a fraudster makes a purchase with your number, the money never makes it out of your account.
Compare that with a debit card. If someone makes a fraudulent purchase using your debit card, it comes right out of your bank account. In order to limit the access to my bank account, I use a credit card instead. Yes, the money will be recovered with a debit problem, but first you won’t have access to the money, and there can be consequences for your checking account. I’d rather have someone else’s money at risk than my own, especially in this age of database breaches.
While there are some debit cards that offer rewards like cash back, for the most part, if you want access to rewards and free stuff, you need to use a credit card. Whether you decide to use rotating category cards, flat rate cash back credit cards, or some combination, the reality is that you really can get better rewards for using credit cards.
I’ve already received more than $1,000 worth of cash back, gift cards, and travel rewards this year, and it’s just into August. While that does include a recent signing bonus, that doesn’t change the fact that my use of credit cards is helpful. As long as you stick to your spending plan, being sure to only buy what you would normally, and as long as you don’t carry a balance from month to month, it can make sense to use credit cards for all your purchases, from groceries to travel to gas.
Many credit cards come with extra perks that aren’t always available when you use a debit card. You might get travel insurance, or you might get price protection on your latest purchase. One of my credit card issuers has a special relationship with a rental car company. I end up getting a discount every time I use that rental car company, and pay with the appropriate credit card. It’s a nice perk that I can use regularly to save money.
Additionally, many credit cards offer perks like discount concert tickets, as well as rental car insurance, concierge service, and extended warranty protection. You might be surprised at all the extras you have when you read the member benefits section of your credit card agreement.
With the right planning, it’s possible to use credit cards regularly. As long as you pay the balance each month so that you aren’t paying a high rate of interest, you can end up ahead in your finances. Being able to reduce the risk to your money, as well as the ability to gain a number of advantages, can make using credit worth it.