The Advantages Of Credit Cards Over Debit Cards

You may want to use a credit card over your debit the next time your shopping. In fact, it may make more sense and be advantageous to replace debit card use virtually everywhere. Using a credit card for purchases and paying bills provides you benefits that using a debit card does not.


First, why are there benefits to using credit cards? Credit card companies charge higher fees to merchants when you pay with a credit card. This means that credit card companies such as Discover, VISA, Mastercard and American Express make more money as a percentage of the transaction. Thus, they are incentivized for you to pay with a credit card instead of a regular debit card that is linked to your bank account.


The perks associated with using a credit card are numerous. The most well-known credit card benefit is cash back. This typically is around 1-2% but can more during special offers or on certain purchases. In other words, if you spend $100, you will get $1, $2 or even $5 back. That is pretty sweet, right?


Credit cards also give you the flexibility to buy now and pay later. As long as you pay the balance before the payment date is due, you will not be charged any interest or fees either. Credit cards also provide you with additional security. If unauthorized purchases are made, the card will be frozen, and you will not be responsible for fraud. Debit cards also offer fraud protection, but you will lose access to any money you had while an investigation is ongoing.

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