This is not going to be a very popular post. Through the years, statistics show that debit cards are way more popular than credit cards for everyday transactions. Which one is a wiser or more prudent way to go?
Identity theft -ADVANTAGE - CREDIT CARDS
Credit cards are much safer than debit cards. A credit card gives an identity thief access to your credit line. A debit card gives an identity thief access to your bank account. Plus most credit cards are no liability type programs where you just have to notify them of a fraudulent transaction and they remove it no questions asked. With a debit card, you have up to 60 days to report it. After that time period, you run the risk of not being reimbursed for that transaction. Statistics would forecast that every one of us will have a problem with identity theft of some kind.
DISCLAIMER: I do think that credit card companies will start to make it more difficult to report the fraudulent activity assuring that many card members will never do so. I am starting to see a change in the language that requires a card member to jump through more hoops to get the transaction reimbursed.
Credit Scoring - ADVANTAGE - CREDIT CARDS
Just because your debit card says VISA on it, does not mean it does anything for your credit scoring. Every time your use your credit card for daily transactions and then pay it off, you are creating positive credit activity which is good for your credit score. You get no advantage to your credit score with your debit card.
Reward Points - ADVANTAGE - CREDIT CARDS
There is no question on this advantage. Credit cards have incredible rewards programs for using their cards.
Ironically, if I added one more category, Debit cards would have the advantage. I think that from a budgeting/spending plan standpoint debit cards are superior because you don't have to worry about the dark side of credit cards. When you use your debit card, that expenditure comes right out of your account. That does drive away a lot of temptation. However, the other advantages of credit cards far outweigh those of debit cards.