You might want to ditch your debit card and start using credit cards for regular purchases. Find out why.
- Debit cards offer convenience, but do not increase credit.
- Credit card protection and rewards often make sense.
Check out the best The Ascent credit cards for 2021
Many people use debit cards for everyday purchases, but this is not the best way to get money. Using a credit card can offer more benefits and can help you get rewarded for your expenses. If you primarily use a debit card, you might want to consider using a credit card. Here are five reasons to opt out of a debit card.
1. You will not be able to fund your account using a debit card.
When you use a debit card, you are missing out on the opportunity to accumulate credit. Having a good credit rating is very important and your credit situation significantly affects many areas of your life. By using a credit card, you can increase your credit score.
Paying your credit card bills on time is one way to increase your credit. The age of your credit history is also an important factor. So, if you have ignored the need to create credit, now is a great time to open a credit card and use it regularly to increase your credit age.
2. Credit card provides the best protection against fraud.
While you may have some protection against debit card fraud, its limited protection means you may be liable for charges associated with unauthorized write-offs. Most of the top credit cards have a $ 0 fraud liability policy, which means you don’t have to worry about paying unauthorized charges from your card. Before getting a new card, make sure it provides this level of protection. Then, if you notice an unauthorized transaction on your credit card account, simply contact your card issuer to dispute the charge.
3. When using a debit card, the dispute process can take a long time.
Sometimes unauthorized charging occurs or errors lead to charging errors. The process for challenging a debit card can be lengthy. Since your debit card withdraws money directly from your checking account, you have no disputed funds while you wait for the bank to investigate. If you have limited funds in your account and the transaction in question represents a significant amount, waiting for an investigation can be stressful.
Credit card issuers have anti-fraud teams that investigate fraudulent transactions and other issues. In many cases, they will charge your account until they investigate and resolve the issue. Since credit cards don’t accept money directly from your bank account, you don’t have to worry about your money being unavailable.
4. You do not receive an award.
You can earn bonus points simply by using your credit card to shop with your bonus credit card. You can redeem points for things like travel, gift cards, and credits on your statement. If you don’t use a credit card, you lose your reward.
Some banks offer cash-back reward debit cards, but these cards generally offer low reward. A credit card with excellent rewards can earn at a higher rate, plus the card can have other valuable benefits.
5. You are missing out on purchase protection and other benefits.
Debit cards do not provide purchase protection or other benefits. Many credit cards offer useful benefits such as extended warranties and return protection.
It makes sense to use your credit card for everyday purchases. It might be time for you to ditch your debit card and get a credit card. Just make sure you only take what you can afford and pay the full balance to avoid costly credit card interest.
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