4 Good Reasons to Use a Credit Card Instead of a Debit Card

In general, buying things on credit is better than using debit cards, as long as you are responsible with your spending. There are several benefits to using a credit card to make purchases.

Financial flexibility

Credit is the most convenient way to pay for needed items while enjoying the flexibility of paying later.

You can make repayment according to your means, as long as you meet the minimum monthly payment.

Those who live beyond their means, of course, can get sucked into a trap by credit cards, so do not make any purchase you cannot pay off later.

Builds credit history

Credit reporting bureaus have a lot of information about you. Your credit profiles and scores are calculated based on the financial information you give credit reporting bureaus like the loans you applied for, paid up, or defaulted on.

In order to obtain credit, you have to use it. Although this may seem unfair, responsibly using those credit cards over time will lead to a better credit score, and a higher credit score will allow a borrower to get a larger loan, such as for a house, car, or boat.

Fraud protection

Unlike debit cards, credit cards provide some level of fraud protection since they are separate from your bank account. If a thief steals your debit card information, the money immediately leaves your bank account and is difficult to recover.

If someone uses your credit card information to make fraudulent charges, you should alert the card issuer immediately.

Most credit card companies fight fraud on your behalf, and cardholders are rarely held responsible for unauthorized charges.

Card rewards

A cashback incentive is one of the most common benefits of using credit cards. Special offers on flights and hotel accommodations are also possible depending on the credit card you use.

One suggestion is that you pay off your credit card balance in full and on time if you hope to maximize your rewards. Otherwise, the interest on your balance will likely outweigh your rewards.

Also, make sure you get a credit card without an annual fee.

You can only benefit from the use of credit cards when they are used responsibly and repaid on time.

Once interest accrues on unpaid balances, charging credit card interest is no longer a cost-efficient method of paying, and debit cards are considerably better as they will help you live within your means.