Credit or Debit? 3 reasons to stop using your debit card (immediately)
tl;dr: Using a debit card to pay for your purchases is essentially allowing the banks to steal (free rewards) from you. If you usually respond “debit” when asked “debit or credit?” then keep reading…
If you still use a debit card, we’ll give you a pass as long as you’ll stop after reading this. Debit cards became largely popular in the 2000’s when writing checks stopped being cool. They were convenient and the funds came out of your account immediately making it much easier to keep track of your purchases and account balances. However, a lot has changed over the past decade as banks have become more competitive in the fight to gain new customers and as the popularity of credit cards has risen. Here are three reasons why it’s time to retire your debit card in favor of a credit card:
- Rewards, rewards & more rewards: Rewards debit cards are a dying breed which means that credit cards are the only way to earn perks like airline or hotel points, cash back & 0% interest. In addition, with certain credit cards now offering over $2,000 in rewards for signing up the reason to use your debit card is zilch.
- Purchase Protection: Using a credit card instead of a debit card gives you complimentary coverage such as return protection, travel protection, extended warranties & return protections depending on the card. Credit cards also typically provide more coverage for fraudulent transactions keeping you safer if your card or identity is stolen.
- Credit Health: Your credit card account information & payment history reflects on your credit report which helps improve your credit score! One of the most common reasons for poor credit is simply lack of credit. Using a credit card to make and pay off your purchases will help boost your credit score (assuming you act responsibly).
Debit cards are so 2009. If you’re ready to ditch the debit card, send us a note at #AskTPS – we’re here to answer any of your questions!