6 under-the-radar benefits of using a debit card instead of a credit card (2024)

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• Leaving the cash at home and using your debit card may have more benefits than you think.
• Using a debit card is a great way to track spending and stick to a budget.
• Using a debit card instead of a credit card can also protect your credit score.

It's so commonplace today to swipe a card to make purchases that you probably don't consider the reasons behind using type of one card over another. Despite conventional wisdom that you should use a credit card for most charges, there are several benefits to using a debit card.

In fact, a 2022 survey by the Federal Reserve on consumer payment habits found that debit cards were "the most used and the most preferred" — 44% of the participants said they preferred to pay with a debit card, while 32% chose a credit card.

Here are six benefits to using a debit card.

1. No debt or high interest

Because your debit card instantly deducts money from your checking account, no debt adds up like when you use a credit card. And because you aren't borrowing from a lender, checking accounts don't charge interest each month (or allow you to overspend in the first place). Make sure you have a free checking account so there aren't any account fees. Instead of a line of credit with a credit card, you have a direct line to your personal checking account.

2. Can be used with digital wallets

If you want to, you can save your debit card information to a digital wallet, like Apple Pay or Google Pay. These services don't store your personal information, which adds an extra layer of security to your transactions.

3. Can help you stick to your budget

This is my favorite. I always say you have to know where your money is going. The simple act of tracking your spending can make you more aware of how you are spending your money, and help you uncover areas where you can cut costs. Because you can see the immediate effect of your spending by viewing your checking account, sticking to a budget becomes easier.

4. Using a debit card may earn you rewards or points

Debit card rewards may not be as numerous as their credit card counterparts, but you can still earn perks from everyday spending. Some banks will offer cash back rewards or a loyalty system where you build up points that can be redeemed for discounts, sales, and other offers.

5. Your credit score doesn't matter

You don't need a high credit score — or a credit score at all — to open a checking account and receive a debit card. So whether you're a young adult opening their first account or someone trying to build their credit, a checking account provides a safe place to store and manage your money.

Using a debit card is also a great way to get used to handling money before you get a credit card. Any mistakes or lessons learned with cash can be cleaned up pretty quickly the next time you receive income. If you make a mistake with a credit card, it can impact your credit score for seven years.

6. Convenience

Most retailers, venues, and other providers accept debit cards, making them an easy way to complete purchases without having to carry around cash. And believe it or not, there are retailers that do not accept credit cards or certain credit cards because of merchant fees. You can also access funds and make withdrawals from an ATM without making a trip to the bank.