Credit Infocenter

Four Advantages of Using Credit Over Debit Cards

Written by: Kristy Welsh

PHOENIX, AZ--(05/29/2012) - Have you decided to stop using a credit card? If you've gotten in trouble due to excessive credit card usage, it may be a good idea. However, if you can control your spending habits, credit card use can actually save you money.

Some credit cards offer amazing rewards programs, some even offer cash back. Using a debit card per transaction is no more expensive than using a credit card. If you have excellent credit, it would be worth the time to do some online rewards comparisons to see if there is a beneficial program out there.

However, should you decide just to stay with the credit cards you have, it's still often an advantage to use a credit card over a debit card. Here are some situations:

  1. Building Credit. Buying things with your debit card will do little to help you rebuild your credit. Even if your card offers little or no rewards, using your credit card and paying off the balance each month goes a long way to earn “points” in your credit score.
  2. Coverage for Unexpected Travel Problems. Credit cards sometimes offer trip cancellation or trip interruption coverage or coverage for lost luggage.
  3. Foreign Transaction Fees. If you're traveling out of the country, foreign country credit card fees are much cheaper than debit cards. If you're spending thousands of dollars, small differences in fee percentages can add up to a lot of money.
  4. Billing Errors. While many banks offer protections for billing errors and fraudulent charges when using a debit card, they are typically a consumer perk, not the law. The Fair Credit Billing Act spells out exactly how credit card issuers must handle disputes. For instance, the time to file a dispute with a credit card is often much longer than the time you have to notice an error in your debit card statement.

Founded in 1997, is a free one-stop destination for consumers looking for free advice on repairing bad credit and rebuilding good credit. It advocates the self-help approach to credit and debt management. Kristy Welsh is the author of several books on personal finance, including "Good Credit Is Sexy", a tongue-in-cheek guide to managing your credit. CreditInfocenter also has a FREE credit repair app which can be downloaded for the Android market.