Credit Card or Debit Card?

There is currently 1 trillion in spending using debit cards. The question is should you use a credit card or a debit card for your purchases? This really depends on your current circumstances. The consumer union currently states that if a consumer uses there debit card 20 times or more a year they will spend $223 in bounced check fees. The individual that does not use debit cards pays an average of $40 per year. There are advantages and disadvantages to both types of cards.

If you are a person that holds a balance on your credit card it might make sense to use your debit card. If you are the type of person that has a credit card with no annual fees, and you don’t hold balance on your credit card then credit cards are the way to go. The reason for this is you can keep your money in a interest bearing account as opposed to using your debit card which takes the mosey directly from your interest bearing checking.

There are a lot more advantages to using a credit card especially if you pay off your balance every month. There are credit cards that will reward you with points for every dollar you spend. Your debit card does not provide this type of reward what so ever. Using your debit card like cash can get out of control and cause bounced checks and costly insufficient fund fees. Also debit cards do not report to the credit bureaus as good credit like credit cards.

Just remember that using a credit card should be used responsibly and is not for everyone. If you can’t control impulsive buys then a debit card might be ideal for you.

*some information was taken from

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Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.