Most of the time when I make a purchase, I use my debit card over my credit card. I don’t usually carry much cash, but like the idea of spending money I have rather than racking up a balance to pay later. Lately however, it has been brought to my attention that using a credit card probably makes more sense. Here are some of the reasons why to use your credit card over your debit card.

  •  Not Associated with Your Bank Account. When you make a transaction with your credit card, the funds paying for the transaction are that of a lender, not your personal account. If someone get ahold of your card and starts shopping, your personal banking accounts aren’t affected.
  • Liability for Unauthorized Transactions. If your card is lost or stolen and somebody racks up big charges, you don’t want to be held liable. With a credit card, you are only liable for $50. Although, you should report it immediately, if you do not notice it for 90 days or more, you still are only liable for $50, unlike a debit card.
  • Liability in Disputes. Making a purchase with your credit card affords you the opportunity to dispute a transaction if it goes sour. If something goes wrong, you can simply contact your credit card company and put a hold on payment. You will then follow a dispute process, but you won’t be liable for the transaction until everything is settled.
  • Bounced checks. Debit card users are hit with more fees — a lot more. Many consumers don’t realize that a bank will approve debit transactions even if they have insufficient funds in their account. Then the bank tacks on a $35 overdraft fee, which doesn’t become apparent until you get your monthly statement.
  • Immediate withdrawal of funds. Smart use of a credit card is like getting a free loan for a month, whereas using a debit card means the money exits your bank account right away. Using a credit card lets you keep your cash in an interest-bearing account for an extra 30 days. Over a long period of time that can add up.
  • Rewards programs. Most programs tend to be more generous to credit card holders than debit card uses. Whether it’s free travel, cash back or any other program, credit cards have better offers.

Obviously if you don’t qualify for a low interest credit card, or you have issues with spending or excess debt, using a debit card may be the way to go.