Question of the Day: Debit or Credit?

Jan 27, 2015
Question of the Day, Credit Cards, Identity Theft, Checking Accounts, Debit Cards

Consider yourself in good company if you wonder what are the best situations to use a credit card in lieu of a debit card.  Daily Finance identifies several instances that you should always choose credit:

  1. Online purchases:  Credit card fraud is easier to fix than if someone drains your bank account with your debit card.
  2. Gasoline and Hotels:  Purchasing gas with debit card can lead to short-term hold of $50 to $200 (hotels) so if your balances are low this can lead to overdraft charges.
  3. Large purchases:  credit cards provide purchase protection if item is defective and also the opportunity to stop payment
  4. Dubious places:  if a retail establishment looks sketchy (and you still need to make a purchase there), it is easier to deal with fraudulent credit card transactions vs. debit card transactions.

So, why use a debit card at all?  Well, if you can’t control your spending then a credit card can become a weapon of mass consumption.


Check out the NGPF lesson on Picking a Payment Method.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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