Stop Using Your Debit Card

Card for PaymentStop using a debit card to pay for purchases. A credit card is much more suited for this for various reason.

Fraud Protection

A credit card offers more protection than a debit card in terms of fraud prevention and customer service.

Let’s say hypothetically you purchase gas at a station that you normally don’t go to. You swipe your card, you pump your gas, and you go home for the night. Unknownst by you, the gas pump you used was rigged by a rogue card scanner and your card information was captured. The next morning you notice that your account is missing $1,000.

  • If you swiped a debit card at the pump then the money that was readily available to you in your bank account is gone. Of course, your bank might offer some fraud protection, but the $1,000 is immediately gone until the bank potentially got around to reimbursing you. While the bank investigates the fraud you may not be able to access your account due to banks freezing the account. If the fraud was not reported in 60 days, most banks have the right to say ‘sorry, better luck next time.’
  • If you swiped a credit card at the pump then the thief charged $1,000 to your credit card but did not touch any of your ‘own’ money in your bank account. You still have money available to pay bills in your bank account until this situation is cleared up by your credit card company.

Cash Back and Other Promotions

Credit cards can offer incredible rewards and points and if you aren’t using it you are losing out on the money. Most credit cards offer a 1-2% ‘cash back’ promotion on every purchase you make with the card. At first, it may seem like a small amount but the points accumulate faster than you think.
Let’s say that in one year you have utilized your credit card for $15,000. You have made many purchases from groceries, fuel, and more. At 2% your cashback balance would be ~$300. That is a free $300 assuming you did not pay any interest on the card. Now if you made those same purchases with a debit card the following year you would earn $0.00 in cashback offers.

Build Your Credit Score

Credit cards are awesome for building your credit score, especially at a younger age. As long as you make your payments in full and on time you will always be improving your credit score. Debit card usage does not impact your credit score as banks do not report to a credit bureau.


Long story short, credit cards can definitely be a scary tool, but only if it is used irresponsibly. If a credit card is used appropriately it has great benefits that outperform a standard debit card. There are much more benefits to using a credit card over a debit, but there are my ‘top 3’ reasons why we should start using them.

Bonus Tips

  • If you do plan on reducing the usage of your debit card (you should) consider calling your bank and requesting a maximum withdrawal/purchase limit of your debit card to something like $200-300. This allows you to get money from an ATM or make purchases in a pinch, however, your chance of losing a greater amount of money is zero.
  • Do not go overboard when signing up for credit cards. Depending on your lifestyle one or two different cards can be enough. Opening a multitude of credit cards in a small timeframe can impact your credit score negatively due to having multiple accounts that have not ‘aged’. The age of your credit account is very important in your credit score calculation.
  • When shopping for a credit card there many things to consider. In my opinion, a credit card with ANY annual fee is not worth having. Understandably, cards with an annual fee may have better benefits (interest rates, promos, etc.) but it is not worth having an additional yearly expense.
  • The most effective way to build your credit score with a credit card is to not pay off the balance immediately but allow your credit card to post a statement (usually monthly) of what you owe then pay it off immediately and in full. If the payment isn’t made on time you will most likely be hit with a late fee (~$35) and you will be charged interest. If you pay the minimum payment on time then you will avoid the late fee but you will still be charged interest. If your credit card payment is on time and in full then you will not be charged any fees or interest. The credit card company will see you are a responsible user and therefore report your creditworthiness to the credit bureau.
  • When redeeming your credit card’s cashback promotions always apply the cash back to your credit card’s balance or deposit it as cash to your bank account. Do not redeem the points for gift cards or Amazon purchases (if you are a discover card customer). Let’s say I purchase a $100 item on Amazon with my credit card. If my cashback promo is 2% then I would be rewarded $2.00 in additional cashback. Now if I bought the same item and paid $50 with my credit card and used $50 of my cashback to pay the full $100 then I would be missing out on money since the cashback payment method does not earn cashback on itself. I would only receive $1.00 this time around since I get 2% cash back on the $50 I paid with my credit card. Yeah, it’s only a dollar, but this adds up and small changes make a large impact down the road.

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