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The Great Debate: Debit Or Credit?

With the presidential campaign season in full swing, you may be getting tired of debates that never seem to resolve anything. Here’s one debate, however, that we can settle once and for all: which is better, debit or credit cards?

 

The answer is — both! Debit and credit cards both have advantages, and which is best for you really depends on multiple factors, such as what you’re using the card for, what kind of rewards each offers, and how good you are at managing a budget. To help you decide which card is right for you at any given time, consider these advantages and disadvantages:

Your trusty debit card

The good:

 

  • Because a debit card is tied to your checking (and sometimes savings) account, using one is like spending cash you have.

  • A debit card can help you stay on budget and avoid interest expenses that come with credit cards

  • Debit cards are widely accepted, and you can use a debit card pretty much anywhere you would use cash, a credit card, or a check.

  • New debit cards now have chip and PIN security, just like credit cards.

  • When you’re paying with a long line of people behind you, a debit card is a lot faster than writing a check.

  • When you use a debit card tied to your Kasasa account, you can qualify for rewards such as refunds on your ATM fees, a higher interest rate, cash back, or free digital downloads from iTunes and Amazon.

Things to consider: debit cards don't offer the same type of fraud protection that credit cards have, and resolving individual instances of fraud can be more difficult and time-consuming. What's more, using a debit card for purchases won't help build your credit score.

The power of credit cards

 

  • Your buying power isn’t limited to the amount of cash you actually have in your checking account.

  • Purchases are secure and protected by law against liability for fraud committed against your account.

  • They’re accepted everywhere cash or debit cards are.

  • Many credit card issuers have rewards programs that allow you to earn points toward merchandise, discounts or free gifts.

  • Using a credit card wisely can help build your good credit.

CAUTION: The most obvious disadvantage of credit cards is the potential to run up debt. Too much debt can adversely affect your credit score. You also must pay interest on the money you borrow when you use a credit card, and interest rates can be high.

So, debit card or credit card?

Generally, it’s good to use a credit card for big-ticket items, online purchases, or when you’re traveling — instances where an extra layer of security can be valuable. Debit cards are perfect for day-to-day spending, like your weekly coffee-shop beverage splurge or groceries for the week. And when you use your Kasasa card, you can be confident your choice will be a rewarding one!

Tags: Credit cards, Rewards banking, Banking

About Kasasa

We believe your money should do more... for you and your community. Founded in 2003, Kasasa is a financial and technology services company working to help empower consumers to take control of their finances and be proud of their money by banking locally with community banks and credit unions in your neighborhood, that you know and trust.

These local institutions have roots in their communities, care about people over profits, and are actively invested in local businesses to help keep the economy strong (unlike some of the megabanks we could name).

We believe you shouldn't have to choose between the best banking products, the best customer experience, or keeping your money local, where it can do more good. We've created ethical banking products and partnered exclusively with community banks and credit unions. So you can have it all.

Kasasa accounts are available at community financial institutions around the country. Find one near you at Kasasa.com to get free checking that pays cash rewards, the only loan with Take-Backs, and more. All while keeping your money in the community, so you can always be proud of your money.