You may want to ditch your debit card and start using credit cards for your regular purchases. I found out why.
A lot of people use debit cards for their everyday purchases, but that’s not the best way to go. Using a credit card can provide more benefits and can help you earn rewards on your spending. If you primarily use your debit card, you may want to consider a credit card instead. Here are five reasons to give up your debit card.
1. You will not accumulate credit by using a debit card
When you use a debit card, you run out of credit. Having a good credit rating is essential, and your credit situation has a significant impact on many areas of your life. By using a credit card, you can increase your credit and increase your credit score.
Paying your credit card bills on time is one way to build credit. The age of your credit history is also an important factor. So, if you have been ignoring the need to build credit, now is a great time to open a credit card and use it on a regular basis so that your credit age rises.
2. A credit card offers better protection against fraud
While you may enjoy some protection against fraud by using a debit card, its limited protections mean you may be responsible for the costs associated with unauthorized debit. Most of the best credit cards have a $ 0 fraud liability policy, which means you don’t have to worry about paying for unauthorized charges made with your card. Before getting a new card, make sure it offers 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. The dispute process can be long with a debit card
Sometimes unauthorized charges occur or errors lead to billing errors. The process of disputing debit cards can be lengthy. Since your debit card withdraws money directly from your checking account, you don’t have the disputed funds while you wait for the bank’s investigation. If you have limited funds in your account and the transaction in question is a large amount, waiting for the investigation can be stressful.
Credit card issuers have fraud teams that investigate fraudulent transactions and other issues. In many cases, they will remove the charges from your account until they investigate and fix the issue. Since credit cards don’t take money directly from your bank account, there is no need to worry about your money not being available.
4. You don’t earn any rewards
You can earn reward points simply by using your credit card for purchases with a reward credit card. You can redeem points for things like travel, gift cards, and statement credits. If you don’t use a credit card, you’re missing out on rewards.
Some banks offer debit cards with cash back rewards, but these cards usually offer a low reward rate. A credit card that offers great rewards can earn a higher rate, and the card can have other valuable benefits as well.
5. You miss purchasing protections and other benefits
Debit cards do not offer purchase protections or other beneficial benefits. Many credit cards include useful benefits such as extended warranty coverage and return protection.
It makes perfect sense to use a credit card for your everyday shopping. It might be time for you to ditch the debit card and get a credit card. Just make sure you charge only what you can afford and pay off your balance in full to avoid expensive credit card interest.