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Your Take: Why Use Debit Cards?

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They lack the same protections as credit cards, they allow access directly to your checking account, and many of them don’t have cashback or any other benefits to speak of. So, why do so many people use debit cards!? I was shocked to find this stat, “Debit cards have overtaken credit cards as Americans’ plastic of choice for in-store transactions—33 percent debit, compared with 19 percent credit,” in a scary article about debit card fraud. I can understand it if you use debit cards because you can’t get a credit card or you don’t trust yourself with a credit card, but outside of those two reasons why would anyone use debit?

Educate me!

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41 Responses to “Your Take: Why Use Debit Cards?”

  1. MoneyNing says:

    … because Costco accepts debit cards and American Express only and I don’t have an AE card!!!

  2. MattJ says:

    I use a rewards credit card for in-store transactions, unless I want cash back from the register, which many merchants will provide for free with purchase.

    I have several family members who simply won’t have a credit card, period, so they use debit cards all the time.

  3. i use a credit card, as you say, because of the protection it offers, but i vaguely recall that you can use a debit card on the credit network — next time a cashier asks you whether the transaction is ‘debit or credit’ say credit and see what happens. your money will be taken out of your bank account, just as if it were a debit transaction, but you do have the fraud protection because the transaction was taken on a credit network . . . if i’m not mistaken!

  4. j.w. says:

    Coming from a recent college grad…I never carry cash…only my debit card. It’s protected and gives me rewards just like a credit card. But unlike a credit card I’m not worried that I’m incurring my debt on top of student loans. I prefer the use of my own money and the security that I’m not going to be owing someone else part of that money plus more (paying interest)…everyone nows how the credit card works you end up paying more than the item is worth (not alot of college students have steady pay to pay off the card as soon as it post)…Carrying cash in college just isn’t convient. Most of the time the bank you used before you left home (if you went to a non-local college) the atm for it might not be close by or even in there. So you have to deal with bank fees.

    I can truly understand why more people prefer debit cards…using the money you earned…especially with the trend of moving away from living credit. What I can’t understand is why people are still diehard credit card fans…I guess I’m with the school of thought if you don’t have the money to pay for it than perhaps you shouldn’t be buying it and if you have the money why use credit cards?

  5. Lazy Man says:

    I think debit cards are best used for people who have sworn off credit. No Credit Needed is like that. He can reserve rental cars and buy stuff over the Internet which he couldn’t do if he gave up plastic completely.

  6. Tim says:

    depends on the debit card issuer concerning what protections you have. We get cash back and have the same protections as a credit card. I use debit for purchase up to $15 (I get 15cents every time I use the debit card), where the 1% transition point on cash back is with my credit card (except for things like drug store and gas purchases which are higher cash back amts). I also mainly use credit cards, though, because i can earn interest during the grace period.

  7. vh says:

    This is really an interesting exchange on a subject that has always puzzled me. Considering the risks of fraud or robbery (having someone walk you to an ATM at gunpoint), carrying a debit or ATM card around strikes me as a crazy idea. At least if someone racks up a bunch of charges on your credit card, you’re only liable for $50 — and in the past my credit card issuer hasn’t even expected me to pay that much.

    But now I see it’s a “diff’rent strokes for diff’rent folks” thing. What works most effectively with your cast of mind is what works. When I used to carry an ATM card, money washed through my fingers like water — I can’t keep track of cash and hate not knowing where it all went (so fast!!!). And I worry that with a debit card I might draw down my account enough that there wouldn’t be enough left to cover automatic payments for utilities and insurance. When it’s 110 in the shade, you REALLY don’t want to bounce a payment to the power company! To avoid having that happen, you’d need to have even more self-discipline with a debit card than not overcharging on a credit card requires.

  8. STB says:

    I want to pay for groceries with money I have, rather than putting it on a credit card and risk incurring interest charges.

  9. nancy says:

    For the average person, debits are faster and no cash is needed. We are rapidly moving toward cashless at most transaction levels period. Debit uses your own money and doesn’t encourage the “mentality of credit” in my estimation. Credit for those who can’t pay it off everymonth is desensitized buying. I have been there and don’t want to go back. Credit is the “opiate of the masses”. Even paying it off each month allows you to go through the ceremony of buying without immediate cash impacts and any rehab counselor can tell you about how powerful the ceremonies around additions are. If debit legislation needs to be beefed up, that’s where to put the energy then.

  10. Dan says:

    There are a lot of misconceptions regarding the safety of debit cards.

    Jim, I have responded to your post on my blog. With money management practices that we should all have anyway, such as making sure you have your card (or know where it is) every day and matching your receipts against statements, debit cards are just as safe and just as protected as credit cards.

    Here’s the link:

    http://moneymyths.org/blog/2008/01/07/myth-debit-cards-are-not-as-safe-as-credit-cards/

  11. zh says:

    Buying on a credit card makes my brain go, “wheeeee!” I would likely overspend and never think about paying it back (until later, when the bill came, and then I might forget to pay it). Debit card says, “This is your money, in your actual bank account, which you need for other things, so put the shoes back on the rack.” ‘Tis all in the mindset, I guess.

    I have not overdrafted since I was in college (lo, these many years ago); I always use a pin number, even at the gas station; my debit card has Visa protection; and I don’t feel that I’m in personal danger carrying my debit card around (wouldn’t someone be more likely to steal my credit card?). The only thing I wish is that more stores would check ID, but I guess I can’t have everything.

  12. MMoyer2655 says:

    Everyone claims that there is so much risk involved in using credit cards. Eg double billing cycle, change the due dates, whatever. I have been using my citi dividends card for 3 years now and I have had one issue with citi trying to charge me a $12 bogus fee. I simply called them up told them I would like it removed as a courtesy and in 3 minutes it was removed.

    Alternatively, you can beleive Lauren’s Myth:

    “they just want to KEEP your hard earned money for their profits. Playing “Change the Due Date” and double cycle billing, just hoping you’ll mess up once, so they can get you.”

    And miss out on the free $300 cash per year I receive in rewards? No thanks, I’ll play the game. Not to mention the additional interest I make on my money while it sits in a high yeild savings account until the end of the month.

  13. Matt says:

    I’m now working on my finances after years of neglect. I currently have close to $10,000 in credit card debt that I’m trying to get rid of, spread over four cards, each earning 0% interest at the moment. If I spend, say, $300 in a month on groceries and put it on a credit card, that $300 sits there and collects interest at usually 20% or more until the balance of the $10,000 is paid off first. Obviously, that won’t be for a while, so I can’t afford to put anything else on credit. To me, using the debit card is the same as paying cash. Not ideal, I know, but it’s what I have to work with for now.

  14. Sylver says:

    Wow! American banks are sooooooo backwards!!!! I’ve been using a debit card ever since the first issue here in Europe and my account balance is definitely protected. Should I ever find that someone has accessed my account it is my responsibility to immediately notify my bank and call a central reporting number. Such an occurrence did happen to my husband. (He checks his online account balance daily.) He immediately notified the bank which chased the problem down. Someone had made a paper transfer and transposed account numbers which caused the my husbands account to be debited rather than his own. We received an apology, indirectly through the bank, from the other customer and my husbands account to reimbursed. I’m sure that it can be considerably more complicated if fraud is involved but it is important and one’s own responsibility to monitor one’s own bank account regularly.

  15. 10s.Star says:

    I am simply shocked by most of the posts. Until the rules change, I will continue to use credit cards(cc) over debit cards(dc). Here are my reasons why:

    1) Currently, the rewards offered by CC are greater using a DC.

    2) Time value of money. Spend the banks money now; collect the interest on the money; pay with your money 39-50 days later…without ANY fees or finance charges.

  16. Pat Bartolomei says:

    There is one simple reason to use a debit card rather than a credit card – stay out of debt. You can’t spend what you don’t have


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