credit card vs debit card

You’ve heard the phrase about a million times right before you swipe your card through those Point of Sale (POS) terminal at the grocery or department store. (By the way, why the crap can’t those things all work the same way? I have to guess the order of operation at each retailer. Do I swipe then press credit? Do I tell the clerk what I’m using first? Do I press cancel to use credit? You have two choices in this situation. (1) Ask the clerk, “what do I do?” and look like an idiot. (2) Take a guess, screw up the transaction, and get the eye-roll and sigh from the clerk and look like an idiot. Isn’t there some sort of POS terminal governing body?

But that’s not the point of this post. What I’m really asking is, do you use a debit card for most or all of your everyday purchases or do you charge everything on a rewards credit card? Me, I’m a debit card man. I’ve heard from readers and other PF bloggers that the credit card is definitely the way to go. I see a couple of reasons to go with both.

Credit Card vs Debit Card

Pro-debit:

  • Purchase comes out of your account immediately. This can be good and bad depending on how you look at it. Obviously you have a better idea of how much money you have in your account
    Credit Card Approval Criteria

    Criteria Credit Card Companies Use To Approve You

    if it comes right out. On the down side, you are losing the (admittedly miniscule) interest on that money.

  • It’s much harder to spend more money than you have.

Pro-credit:

  • You get the 20 days interest before the bill is due.
  • You get a complete list of all purchases made during the month in one place.
  • You get rewards (assuming you use a rewards card, and you should). (If you use my kick-ass bank, USAA, you get cash back for using your debit card!)
  • If you use Mastercard/VISA, you get certain insurance protections for buying stuff with their card.

Toss up:

  • Returns are the same for either.
  • Assuming your card is Mastercard/VISA branded, you get their liability protection for both types of cards.
  • You still have a fist full of receipts to do something with. (Five cent nickel has a good post asking how to deal with receipts. He’s also running a contest giving away some cool prices, so check it out)

When deciding credit card vs debit card for my next purchase, we use the debit card. I’d like to hear which method readers use and if I’ve missed any great reasons to do one of the other.

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