topic Re: Why would one ever use a debit card over a credit card? in Credit Cards

Why would one ever use a debit card over a credit card?

Anonymous — Fri, 10 Apr 2020 07:44:54 GMT

(Mod Cut)

What is the reasoning behind using a debit card and missing out on the credit card rewards?

Re: Why would one ever use a debit card over a credit card?

Andypanda — Fri, 10 Apr 2020 06:31:06 GMT

A lot of people have control issues when it comes to credit card. Using a debit card might be a way to keep themselves in check. If it wasn't for people overspending and paying intrest for years, if not decades on end, those if us in tge cc gsme would l9se out on a lot of points and cash back.

Re: Why would one ever use a debit card over a credit card?

Anonymous — Fri, 10 Apr 2020 07:34:50 GMT

Not everyone is aware of CC rewards or the protections of using CC over debit cards.

(Mod Cut)

Re: Why would one ever use a debit card over a credit card?

Brian_Earl_Spilner — Fri, 10 Apr 2020 07:28:58 GMT

No, I don't judge because I don't care how people spend their money. An example of why someone would use their debit card is if they don't have a credit card or they don't have a high limit, or not enough free credit. Or, they're like the majority of people who don't know or care enough about rewards to bother.

Re: Why would one ever use a debit card over a credit card?

Anonymous — Fri, 10 Apr 2020 07:41:44 GMT

Just a quick reminder of the FSR policy on myFico. We have posters ranging from new to credit, rebuilding credit, established credit etc, and regardless of circumstances, we will be respectful to all. If it feels like a line is being crossed, it probably is.

Re: Why would one ever use a debit card over a credit card?

CH-7-Mission-Accomplished — Fri, 10 Apr 2020 07:51:10 GMT

@Anonymous wrote:
What is the reasoning behind using a debit card and missing out on the credit card rewards?

It's just a tiny step further than those who pay in green cash for everything. Dave Ramsey has 6.5 million followers. Debit cards are really paying cash. And lots of us got into big trouble living beyond our means with credit cards. In some ways this site is like a 12-step program of sorts. For some people the only cure is total abstinence.

Re: Why would one ever use a debit card over a credit card?

wasCB14 — Fri, 10 Apr 2020 07:58:11 GMT

Possible reasons...

1. Lack of organization as far as paying bills on time (assuming someone has cash to PIF)...less true in an increasingly paperless world with email reminders, perhaps.

2. A low SL can be an obstacle. I used debit for a ~$700 purchase once when my only cards were a $600 Freedom, $2k Discover, and Amex PRG. The merchant only took V/MC.

3. Occasionally there are discounts or surcharges, depending on the method of payment.

4. Debit may encourage people to spend less (though I question whether it is as effective in this respect as using cash).

Re: Why would one ever use a debit card over a credit card?

Anonymous — Fri, 10 Apr 2020 10:47:45 GMT

A lot of people have a hard time wrapping their heads around the fact you can use a credit card and a) never pay interest and b) get cash back. I had to explain this concept to both of my roommates multiple times. I have many friends whom I had to explain the value of a rewards card to as well. Us rewards chasers really are a very small group. Most of my friends would rather just use a single card for everything and that's their debit card. They watched their parents lose everything in the Great Recession which really didn't help their views towards banks and credit. Many of my friends don't even have bank accounts, they use prepaid debit, and they have zero interest in changing that.

Re: Why would one ever use a debit card over a credit card?

Mv350 — Fri, 10 Apr 2020 11:52:01 GMT

4 years ago my credit was horrible due to some crappy situations that happened. My only option was whatever bank that offered me a bank account. Then a no frills secured card. Now I funnel everything through rewards cards. Currently 4% on my PPMC promo.

Some times you don't have any other options. When things change, I changed with the situation.

Re: Why would one ever use a debit card over a credit card?

Gladius — Fri, 10 Apr 2020 12:07:59 GMT

Lack of financial discipline when it comes to getting that $800 CC bill with "only" a minimum payment of $25 due.

Re: Why would one ever use a debit card over a credit card?

Anonymous — Fri, 10 Apr 2020 13:17:52 GMT

@wasCB14 wrote:
Possible reasons...

3. Occasionally there are discounts or surcharges, depending on the method of payment.

In Michigan the gas stations charge extra, usually 10 cents a gallon. With gas being well under $2 a gallon the surcharge cancels reward points. Use a debit card, no surcharge.

Off subject: in my support for small local restaurants I'm paying cash. My short term loss for their gain.

Re: Why would one ever use a debit card over a credit card?

Anonymous — Fri, 10 Apr 2020 14:42:37 GMT

@wasCB14 wrote:
Possible reasons...

3. Occasionally there are discounts or surcharges, depending on the method of payment.

Right

One thing apparently missed by many is that some debit cards do pay rewards.

I personally have"good" (i.e. reward positive) uses, making use of such debit cards , e.g. Paypal Business Debit which usually pays 1%, this month 2%

1) Verizon FiOS auto payment. There is a discount for setting up autopay with a debit card. On my spend, the discount + 1% cashback is better than a credit card alternative

2) Paying income tax through the IRS approved processers. Generally a small (e.g. $4) fee for using a debit card, vs a ~ 2% fee for a credit card. So the small fee + 1 or 2% back can outweigh cc rewards after the fee. When you could use the PPMC as backup (RIP) this generated 3% rewards for a tiny fee. (This year I used my 5% credit card though)

Re: Why would one ever use a debit card over a credit card?

vic6string — Fri, 10 Apr 2020 15:47:10 GMT

Religious reasons. They worship at the Church of Dave Ramsey.

Re: Why would one ever use a debit card over a credit card?

CAS2019 — Fri, 10 Apr 2020 16:04:45 GMT

I will use my debit (or cash if I have it on me) when paying for purchases if the business is a local, small business. The debit "fee" businesses have to pay, is less. Small businesses have a much more difficult time absorbing costs in this economy than larger companies

Re: Why would one ever use a debit card over a credit card?

Anonymous — Fri, 10 Apr 2020 16:15:28 GMT

I remember 25-30 years ago a radio DJ announced how to pay for a program he was discussing. He said, or use your credit card, then said softly, "its like not paying for it at all".

People run up balances and pay just the minimum, and they don't feel it as the minimum payment goes up negligibly. Many who have done that got into big trouble. Then they switched to debit and won't touch credit cards again.

If you have problems managing money and debt, use debit. If you are able to manage cards easily, use credit.

Re: Why would one ever use a debit card over a credit card?

kdm31091 — Fri, 10 Apr 2020 16:26:36 GMT

With finances things are very rarely one size fits all. Some people don't like using any type of card/electronic payment and use cash for everything. Some don't want a bank account and use prepaid cards.

In the case you are asking about, many people do not feel they are disciplined enough to pay a credit card off in full every month. Whether their belief is justified or not, it's not worth getting 1-5% back in rewards if you are paying 15 or 20 or 25% interest. And since many people will rack up a balance and only pay minimum, they'd lose more than they gain by using a credit card. For those, debit is better.

And some people may not have the debt concern but just do not like using credit cards, out of principle. Whether I agree that with that or not, it's their finances and their choice.

Re: Why would one ever use a debit card over a credit card?

icednightpaper — Fri, 10 Apr 2020 16:37:54 GMT

Self-Control, Discounts for autopay/debit, Ignorance (willful or not)...everything that has been said previously. I'd say don't get messed up in how people manage their money. If rewards cards users weren't such a tiny majority, we wouldn't exist at all.

Re: Why would one ever use a debit card over a credit card?

Racer202 — Fri, 10 Apr 2020 16:38:46 GMT

a friend of mine does extremely well and she uses her debit card everywhere she goes. at this point she is well invested and credit card points and rewards matter little to her. i suppose the convenience of one card suits her.

Re: Why would one ever use a debit card over a credit card?

Girlzilla88 — Fri, 10 Apr 2020 16:41:18 GMT

I only have my Debit Card set up for some bills that don't accept CC as I noticed it clears faster or pops up faster in my CU then when I put the Routing etc for the Bank itself (not sure why but I have tried it a few times to test it). It puts a 'hold' for a few days and clears whenever it feels like when it have it set up for Acct vs when I set up the Debit it pops up for that day or the next day shows it cleared out. YMMV

Re: Why would one ever use a debit card over a credit card?

notmyrealname23 — Fri, 10 Apr 2020 16:46:39 GMT

My credit union gives me an interest rate on checking that would be pretty good for a multi year CD, let alone a savings account, for a balance up to $15,000. It's a significant amount of cash back, and it's an incentive to SAVE not SPEND (unlike credit card cash back incentives to SPEND).

The catch is I have to use the debit card for that account 12 times a month.

So I do. Apple Pay helps with that.