Personal Finance

Ditch the Debit Card

Top reasons to use a credit card instead of a debit card

Credit cards > Debit cards

For years now I have been a sole credit card purchaser. Sure, once upon a time cash used to be king (and I’m pretty sure my husband would like to live in a world where that was still the case) buuut welcome to 2021! At this point in our lives, there are very few reasons to keep a large amount of cash on hand or to use your debit card.

Here are my top 4 reasons for choosing to only use my credit card.

1. Building Credit

Responsibly using a credit card for daily purchases and paying off (NOT paying DOWN, paying the bill in FULL) is going to be one of the easiest and best ways to build your credit over time. Thinking of buying a house? Thinking of taking out a loan for a business? Trying to get a lease at a new apartment building? Your credit matters SO much! Start establishing good habits around your credit and you will reap the volume of benefits and “perks” (slightly lower interest rates on borrowing or reductions in fees when applying for a loan) as a result of having a solid credit score. Think 700 or above.

2. Access to Easily Generated Spending Summaries

When you use your credit card for purchases – it makes it easier for you to identify where you are spending your money. Most, if not all, credit card activity is updated online in real time and you are able to have visibility into your daily activity whenever and wherever. Most credit cards will give you a categorized summary of your spending as well – this could be monthly or annually depending on the card. But ultimately making it easier for you to have a grasp on where your money is going and not taking up all of your time trying to figure it out for yourself.

3. Credit Card Points and Cash Back!!

Free money. Yeah I said it. Free money!! This is not a suggestion to go spend more so that you earn more points or get more cash back BUT this is a friendly reminder that when you pay for things in cash or use your debit card, you receive and earn nothing in return. You can earn cash back or points to use on other expenses in the future by simply using your credit card to purchase items you always would have. Think Netflix, Amazon Prime, gas purchases, restaurants, groceries, some utilities (assuming they don’t charge a fee), etc. You could EASILY be making $200+ per year (low ball figure) by simply using your credit card for the majority of your purchases. I honestly can’t remember the last flight I have paid for…it might have been 6-7 years ago? And I love to travel. Thank youuu points!!

4. Additional Oversight and Fraud Protection on Credit Cards

Banks spend A LOT of money trying to protect their clients from fraudulent activity. I mean A LOT….like a disturbing amount of money…that I feel comforted by being a bank customer though 🙂 But sadly there are A LOT of people out there successfully stealing peoples account and personal information.  With that said, I would much prefer to dispute a charge on my credit card and have it be resolved typically within 24-48 hours than having money successfully withdrawn from my bank account as a result of someone stealing my debit card information.

Why? Because it generally takes longer to resolve fraudulent activity from the use of a debit card which could easily interfere with automated payments and withdrawals from your account for utility bills, car payments, mortgage payments, etc. if there are insufficient funds. In addition, this could then impact your credit or you may be charged a late fee or may have to rearrange all of your automated payments and NOBODY has time for that. That’s the actual worst.

Moral of the story, credit cards (used responsibly) are SIGNIFICANTLY better than debit cards. Swipe your card for your purchases, pay the balance in FULL ALWAYS and reap the benefits of great credit, additional fraud protection and FREE money with cash back or points. That’s an easy one, right?!

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