Consumers Prefer Debit to Credit Cards—But is it a Good Idea?

February 21, 2018, Written By Lynn Oldshue

According to recent research, 61% of consumers in the United States say they prefer using their debit card over their credit card. This was a significant increase from the 52% a year ago. While it is a good idea to avoid credit card debt by only spending money you have in your checking account, is it good to always opt for debit over credit?

Due to identity theft concerns, paying with your debit card may not be a good idea. If someone steals your credit card number and makes unauthorized charges, you simply need to alert your credit card company, and they will generally reverse the charges.

But if someone were to use your debit card number fraudulently, the money will disappear from your checking account as soon as the purchase is made. By law, your bank can take up to 10 days to investigate the matter and return your money, which means you will not have access to these funds during this time.

In addition to fraud protection, using a credit card responsibly will help you build a positive credit history, which a debit card will not do. A good credit history will likely result in lower interest rates on your future mortgage and car loans. If you don’t use your credit card for a long period of time, the card issuer could potentially cancel your account. Since lenders like seeing a good mix of accounts on your credit history, not having a credit card can hurt you. Additionally, if you do not have credit, you could have just as difficult of a time getting loans as someone who has bad credit.

Credit cards offer a number of protections that do not come with other forms of payments. Many cards offer purchase protection, price protection, car rental insurance, travel insurance and a host of other features. Check your credit card agreement to see the additional and complimentary perks you receive by making transactions with your credit card.

Finally, many credit cards offer cash back, travel, or other rewards. When you use these credit cards responsibly, you can earn free rewards.

The only downside to using a credit card is the interest rate you will pay if you do not completely pay off your entire balance each month. But as long as you do, there is every reason to use your credit card to make purchases.



The information contained within this article was accurate as of February 21, 2018. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue