Credit Cards

5 reasons to get rid of your debit card

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You may want to ditch your debit card and start using credit cards for regular purchases. Find out why.

Key points

  • Debit cards offer ease, but they don’t build credit.
  • The protections and rewards of credit cards are often worth it.

Many people use debit cards for everyday purchases, but doing so is not the best way to move money. Using a credit card can offer more benefits and can help you earn rewards for your spending. If you primarily use your debit, you may want to consider a credit card instead. Here are five reasons to get rid of your debit card.

1. You won’t build credit using a debit card

When you use a debit card, you lose the opportunity to build your credit. Having a good credit score is essential, and your credit situation significantly impacts many areas of your life. By using a credit card, you can build your credit and increase your credit score.

Paying your credit card bills on time is one way to build credit. The length of your credit history is also an important factor. So if you’ve ignored the need to build credit, now is a great time to open a credit card and use it regularly to age your credit.

2. A credit card offers better protection against fraud

While you may have some protection against fraud when using a debit card, its limited protections mean you may be liable for costs associated with an unauthorized charge. Most of the best credit cards have a $0 fraud liability policy, which means you don’t have to worry about paying unauthorized charges on your card. Before you get 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 lengthy with a debit card

Sometimes unauthorized charges occur or errors result in charge errors. The debit card dispute process can be lengthy. Since your debit card draws money directly from your checking account, you don’t have the funds in dispute while you wait for the bank’s investigation. If you have limited funds in your account and the transaction in question is a significant 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 remove the charge from your account until they investigate and resolve the issue. Since credit cards don’t take money directly from your bank account, there’s no worry that your money won’t be available.

4. You don’t earn rewards

You can earn rewards points simply by using your credit card for purchases with a rewards credit card. You can redeem points for things like travel, gift cards, and statement credits. If you’re not using a credit card, you’re missing out on rewards.

Some banks offer debit cards with cash back rewards, but these cards typically earn a low rewards rate. A great rewards credit card may earn you a higher rate, plus the card may have other valuable benefits.

5. You miss out on purchase protections and other perks

Debit cards do not offer purchase protections or other beneficial advantages. Many credit cards include helpful benefits like extended warranty coverage and chargeback protection.

It makes a lot of sense to use a credit card for your everyday shopping needs. It may be time to ditch the debit card and get a credit card. Just be sure to only charge what you can afford and pay your balance in full to avoid costly credit card interest.

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