Credit card or debit card: my payment dilemma

I don’t know about you, but I am often in a shopping dilemma—do I use my credit card to buy this, or do I use my debit card? Do I want to pay for this over time (plus interest), or do I have the money in my checking account to cover the cost of what I am buying? Both cards are such an easy, convenient way to shop without having to carry any cash. So I try and keep these simple points in mind:

  • Use my credit card—essentially I am borrowing money I have to pay back!
  • Use my debit card—the funds come right out of my checking account, so do I have the money in
    my checking account to cover this purchase?

I find that I do need to use both cards—each has a benefit for me:

  • Credit card—when I use within my spending limit and pay on time, it helps me build a solid credit rating. So very important!!
  • Debit card—since I know I have a limited amount in my checking account, it helps me stick to my monthly budget. It is so nice not to have monthly credit card bills in my mailbox!!

Compare the two payment types for yourself:

You get a bill at the end
of the month for the
money you owe.
Money is deducted
immediately from your checking
Enables you to buy things
today instead of
waiting and saving. But remember: You’ll have to pay the money back
You can only buy what you
can afford with the
cash in your checking account, so you may have to wait and save to make
If you consistently pay
your bills on time and
in full each month, you’ll build a good credit history and good credit
If you don’t overdraw,
you’ll strengthen your
reputation with the bank as a good customer.

How do you determine when you are going to use your credit card or debit card?

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3 Responses to Credit card or debit card: my payment dilemma

  1. David says:

    I never use a debit card because I prefer the legal protections available with credit cards. I pay my balance weekly as I like to keep up and don’t like borrowing money.

  2. Jessica says:

    I dont have much in my visa debit card right now. Does that mean I can go and make a purchase using credit and pay back the money later?

  3. Barbara Raus says:

    @ Jessica – for me a couple things play into whether or not I use credit when my checking balance is low (remember that’s where the money comes from when you use a debit card). First off, I have to remember that I will have to pay that money back with interest. If I’m close to getting a paycheck it might be ok, but if you don’t have income coming in to cover the expense then it might not be the best decision. I also have to think about whether or not it’s an item I really need. For example, I wouldn’t charge a new pair of shoes, but I might charge gas for my vehicle. Make sense?

The Student LoanDown

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