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Written by Karl Kaluza
on January 30, 2024

Before we get into the reasons to use a debit card instead of a credit card, here's a quick rundown of the differences between the two. One major difference is that you don't incur debt with debit cards since money used for a purchase is debited directly from your checking account. This also means you don't have to worry about missing a payment and incurring late fees. 

Debit cards don't require that you have a credit score or credit history. You only need to open a free checking account, which will include a debit card.

There are many benefits to owning a debit card. For those who are budget-conscious or in the process of paying down debt, debit cards are a great part of your budget and debt reduction toolbox. If you use a credit card, you're going backward since you're building up debt. This isn't possible with debit cards.

Many people use credit cards just for the points and always pay their monthly balance. But it only takes one missed payment to ruin all that hard work since late payment fees can be very high.

Debit cards don't allow you to overspend, which helps avoid unexpected bills. This is not true with credit cards. Unless you are watching the balance closely, it's easy to get in over your head with a credit card. Also, some credit cards have annual fees, which you won't find on debit cards.

Debit cards have many other benefits. Using a debit card means paying with cash, which works great with any budget system. Additionally, debit cards are accepted at more locations than credit cards since they have lower merchant fees. And for those who like credit card points, you're in luck. Some debit cards also have rewards programs such as cash back. Speaking of cash, just visit an in-network ATM and withdraw cash for free. Trying that with a credit card (i.e., cash advance) means incurring fees and high interest.

It's difficult to make a mistake with a debit card that might impact your credit score. However, the same is not true of credit cards, where high balances can decrease your credit score. This isn't possible with debit cards since you only spend what's in your checking account. 


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