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Like many people, I carry around a lot of plastic in my wallet. Yet one particular plastic payment method—my debit card—doesn't see much action. In fact, other than the occasional ATM withdrawal when I need access to cash, I haven't used my debit card in years.
There are several important reasons why I don't use my debit card for purchases. Below, I'll share why credit cards are my favorite way to pay, and why you might want to consider making them your preferred method of payment as well.
Credit Cards Offer Better Fraud Protection
One of the primary reasons I opt for credit cards is because they give me better fraud protection. Unfortunately, I learned this lesson the hard way a few years ago.
Some bad guys stole my card information (likely after I used it at a gas station) and made over $2,000 in unauthorized transactions. My credit union didn't catch the fraud and allowed the phony charges to go through. I wasn't even aware there was a problem until I logged into my checking account several days later.
In the end, I did get the stolen money back but t I went through some major inconveniences first. My credit union took several days to investigate the fraud before they returned my money. In the meantime, I still had a mortgage payment, credit card payments and other bills due. Thankfully, I had money in savings to cover the expenses. If I hadn't, I might have incurred late fees, overdraft fees, and other penalties from my creditors.
If the thief had stolen my credit card information, on the other hand, my experience could have been a little less stressful. I would still have needed to alert the card issuer to the fraud. But it would have been the card issuer's money that was tied up during the investigation period, not my personal funds.
Recommended Credit Cards
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60,000Chase Ultimate Rewards Points
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Earn 2X points on Southwest® purchases. Earn 2X points on Rapid Rewards® hotel and car rental partners. Earn 2X points on local transit and commuting, including rideshare. Earn 2X points on internet, cable, and phone services; select streaming. Earn 1X points on all other purchases. |
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$400 statement credit + 40,000 pts.Southwest Rapid Rewards Points
Earn a $400 statement credit and 40,000 bonus points after spending $3,000 on purchases in the first 4 months from account opening. Dollar Equivalent: |
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2%Cashback
Earn unlimited 2% cash rewards on purchases. |
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$200Cash Bonus
Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. |
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1% - 5%Cashback
Earn 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, 1% cash back thereafter. Also, earn unlimited 1% cash back on all other purchases. Special Travel Offer: Earn an additional 4% cash back on hotels, car rentals, and attractions booked on Citi Travel℠ portal through 6/30/2026. |
$0 |
$200Cash Bonus
Earn $200 in cash back after you spend $1500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back. |
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Credit Card Protections Are Often Stronger
There's also the issue of liability. Federal law protects me from theft, card loss, or fraudulent transactions with both my debit card and credit cards. Yet the protections I enjoy when I use a credit card pack a little more punch:
- The Fair Credit Billing Act caps my liability for fraudulent credit card transactions at $50. Plus, the four major credit card networks—VISA, MasterCard, American Express and Discover—have zero-liability policies that should keep me from paying a dime if my credit card is lost or stolen (assuming I report the fraud in a timely manner).
- The Electronic Funds Transfer Act protects me in the event of debit card loss or theft. It caps my liability at $50 if I report a fraudulent purchase within two days. On day three, however, my liability could climb to a painful $500. And if I wait more than 60 days (after my statement) to report the fraud, the bank could hold me liable for 100% of the bogus charges.
How to Dispute a Charge on a Debit Card
Credit Cards Give Me Rewards
Another important reason I always reach for a credit card when I'm in the checkout line is because I like free stuff. Over the years, I've added some great rewards credit cards to my wallet. By using credit cards on purchases I need to make anyway, I've been able to earn some lucrative rewards. I've also been able to redeem those rewards for pretty cool perks, such as my favorite way to use credit card rewards—free travel.
It's worth noting that some debit cards may offer cash back or rewards. However, you can generally get a lot more value from your spending from rewards credit cards.
Get The Most Bang for Your Buck with RewardsBest Rewards Credit Cards
Visit the MarketplaceCredit Cards Help Me Build Good Credit
Credit cards also outperform debit cards when it comes to the ability to help you establish and build good credit. When you open a credit card account, most card issuers will report it to the three major credit reporting agencies—Equifax, TransUnion and Experian. If you use your credit card wisely, it could help you add positive credit history to your three credit reports and, over time, might also benefit your credit scores.
Personally, I have a dozen credit cards and I routinely keep my credit scores in the 800s. But it takes a careful, consistent credit card management approach to achieve this feat. Here's how I do it:
- I always pay on time: This is the main key to credit score success—with credit cards and any other type of financial obligation.
- I aim to pay my statement balance in full every month: Revolving an outstanding balance from month to month is expensive and may cause credit score damage.
- I am selective about applying for new credit: While I'm not afraid to leverage my good credit to score a good deal (especially an attractive credit card sign-up bonus), I do limit how often I apply for new credit.
By comparison, debit cards and bank accounts don't show up on my credit reports. So, they don't come with the same credit-building potential, even if I practice good money management habits.
Credit Expert Shares Her Go-To Method to Improving Your Credit Score
Bottom Line
Critics argue that credit cards are dangerous and lead to debt. Yet the truth is you are in control of how you use your debit cards and credit cards. If you can avoid overspending, there are a lot of amazing perks that these little pieces of plastic have to offer.