Debit Cards vs. Credit Cards: Which Is Best?

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Using a bank credit card for cash advances should be avoided at all costs since you will be charged with heart-attack inducing interest rates plus some form of transaction fee.

So make sure to avoid credit card cash advances at all costs.

Another good reason to have your debit card handy is this.

If you love to travel out-of-state, bank debit cards are often linked to automatic teller machines (ATM) thereby allowing you to withdraw cash in the event that you run short of cash.

However, you might like to check with your bank how much out-of-state transactions will cost you in terms of fees as some banks have decided to charge some sort of fee knowing that people don’t carry much cash when they travel.

For those who have a history of overspending with their credit cards, the use of bank debit cards might be a wiser decision.

It’s really mostly psychological.

When you know that you will be using your own money, and not the bank’s money, to purchase something, it makes you think twice or thrice on whether you really should spend.

For people who are trying to avoid overspending, a debit card serves as a “money conscience” tool.

IMPORTANT: Here is one advantage of credit cards vs. a debit card that you might like to keep in mind.

If there is an unauthorized charge on your credit card, you can report this and no money is taken from you. Banks will cover this entirely at no cost to you.

On the contrary, if there is an unauthorized charge on your debit card, you could be liable for a lot.

Meaning, any fraudulent charges made on your debit card is totally on you. Your whole account could potentially be wiped out.

Yup, you can kiss your money goodbye. Your bank won’t be liable to cover your ass.

Finally, regularly using your credit card and paying off your balance in full each month definitely helps improve your credit score.

And as you know, having a good credit rating is very important if ever you decide to buy a car, a house, or take out a major loan. 💰