When Should You Use Your Debit Card Instead of Your Credit Card?

It is a common misconception that debit cards are safer to use over credit cards. While this may ring true when it comes to credit and overspending problems, it is not always the safe way to go. Over 60% of Americans polled said that they believe choosing debit over credit is safer.

You will feel a sting if there is an unauthorized use on your credit card, but no money is actually taken from you when this happens. Your credit is protected, and the credit card company can help identify and remove fraudulent charges. The same is not true for a debit card. Once someone fraudulently uses your debit card to make purchases, you may have to jump through some hoops to get it back. Some people do not get their money back, while others may have a chance at doing so. This depends on the specific financial institution that you work with and their security policies.

That said, there are are a few instances when it would be beneficial to use your debit card over your credit card. Keep reading to learn more.

When facing fees

When fees are going to be added to the total cost of an expenditure based on its total, then a debit card will be the way to go. You don’t want to spend just as much paying for the fees then you would whatever it is you’re paying. Usually, additional fees apply when using a credit card at ATMs, when paying taxes or when you pay your tuition.

Purchasing items from a small business

Small businesses will often have to pay the cost of processing a credit transaction, which means they may have to raise their prices to account for this extra cost. If they don’t, this cuts away from the profit they are trying to make. It can be best to help alleviate this headache for them and go with a debit card or pay with cash.

You are in debt

We all have been there one time or another. You get swipe happy with your credit card and have all this “extra” money to use, but then need to stop using it. If this is the case, removing the credit cards from your wallet and not using them until they are paid off is the best way to go. You will ruin your credit if you continue to swipe them time and time again without ensuring you are paying your bills on time. Debit cards are a better option for you if you find that the card calls to you to purchase whatever you want, whenever you want.

Keep in mind that working with an excellent, consumer-focused bank can help you reduce the chances of making financial mistakes. With the right people looking out for you, they will help you refrain from falling into these traps and will provide you with other helpful advice too.