Home Finance The Benefits of Using Debit Instead of Credit

The Benefits of Using Debit Instead of Credit


The differences between debit and credit cards lie in how they interact with you and your bank. So with that in mind, are the benefits of debit over credit cards, and why debit might be the right choice for you.

It’s more convenient than cash or check

Think of a debit card as a plastic version of checks or money. Instead of carrying around cash or your checkbook, you can just carry around one card to pay for purchases directly through your savings account. This convenience is one of the main reasons why people get credit cards. With a debit card and an attached savings account, you can even automate a wide variety of monthly or annual payments to be taken straight from your account each time, nixing the need for long payment lines. All of this is why digital cash transfer company PayPal has issued its own MasterCard-stamped debit card aimed at people who don’t have bank accounts or cards of their own. Even pioneers in the digital money game can’t help but recognize the convenience of debit cards.

It lets you keep, maintain, and develop a savings account

If you’re having trouble with saving money and navigating your finances, it’s better to stick to basics and go with debit. Debit cards allow you to maintain and keep growing a savings account, which can open a number of options for you in terms of growing your money. Banks can offer anything from a 0.01% to a 1% growth rate on savings accounts, provided you don’t go under the specified maintaining balance. While that may seem small, growth is growth, and if you’re in the red, any little amount helps. Although both debit and credit cards are convenient plastic versions of hard cash, using credit cards to pay for purchases may actually hurt your savings, which won’t happen with a debit card.

It can help you stay out of debt

Credit cards allow you to spend money you don’t yet have. If you’re not mindful about your spending, this can significantly increase your debt, especially as credit cards tend to have such high interest rates. In fact, as of January 2020, Americans pay an average 21.28% in credit card interest rates. Debit cards, on the other hand, don’t come with the high rates nor risks. A ‘Credit vs. Debit’ post by Petal Card notes how debit cards only allow you to spend money you currently have, so there’s no paying anything back or accruing interest. Your spending will be limited to what’s in your savings account, with the option for overdraft protection, which lets the bank temporarily pay on your behalf. A debit card is much more advisable than a credit card if you want to avoid any long-term debts and actually save money.

Debit cards have plenty of benefits over credit cards, which isn’t to say that credit cards are useless. ‘Will That Be Debit or Credit?’ by Yahoo Finance outlines the many advantages of credit cards, almost all of which are hinged on financial discipline. In short, it takes more financial savvy to navigate the confusing terms of credit card companies and get the most out of your buck. But if you want to just maintain a savings account, automate regular payments, and stay out of debt, your best bet is debit.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.