Personal Finance

5 reasons to stop using your debit card and switch to a credit card instead 

Maurie Backman

Published: February 24, 2025 8:12 am

I got my first credit card around the same time I got my first debit card. I was a freshman in college and needed both cards for different reasons. But I soon learned that using a credit card offers a world of benefits that debit cards just don’t match.

These days, I use a debit card sparingly — basically, only when the charge in question will incur an extra fee if I swipe a credit card. And here’s why I think everyone should ditch debit cards (unless it’s a situation like that) and use credit cards instead.

1. You won’t earn cash back or points on your purchases

The credit cards I have offer me cash back on everything from groceries to gas to takeout meals. I also have credit cards I use specifically for travel because they give me access to perks like airport lounge access.

With a debit card, you can forget about benefits like these. You won’t typically earn cash back on your purchases, so you’re effectively losing money by not using a credit card instead.

2. You may have issues with disputed charges

Have you ever had to dispute a charge on your credit card? It’s annoying, but I find that credit card companies make it as painless as possible. Usually, they give you a provisional credit while the dispute is being investigated.

Things tend to work differently with debit cards, though. With a debit card, the money comes out of your account when you swipe it, which means you may be out the money while you wait for your bank to investigate. That could put you in a situation where you can’t cover certain bills.

3. Holds on your account could tie up actual cash

If you’ve ever stayed at a hotel, you’re probably familiar with the concept of a hold on your account. It’s basically the hotel’s way of making sure they have a way to charge you for incidentals, like if you decide to raid the minibar in a fit of late-night hunger. Plus, it gives them protection in case you decide to throw a rager and wind up damaging the room.

When you hand over a credit card at check-in, that hold may tie up a portion of your line of credit — but that’s it. When you use a debit card, a hold on your account can tie up actual money of yours so you can’t use or withdraw it. If that sounds problematic, well, that’s because it certainly has the potential to be.

4. You won’t build credit

The higher your credit score, the easier it becomes to borrow money when you need to. And also, the better your score is, the more affordable your next loan might be, whether it’s a mortgage, car loan, or personal loan.

When you use a debit card, your payments aren’t reported to the credit bureaus because you’re simply tapping the bank account your card is linked to. On the other hand, credit card companies do report timely payments to the credit bureaus. So using a credit card on a regular basis could actually help your credit score improve provided you pay your bills on time and don’t rack up large balances while only paying the minimum.

5. You won’t get added perks

When you use a credit card to buy things, you often get perks that may include extended warranties or price protection. Debit cards don’t give you that. So once again, using a debit card over a credit card could, in essence, cause you to lose out on money, such as if the price on your purchase drops after you’ve brought it home.

I’m definitely a fan of being cautious with credit cards. And my personal rule is to never charge an expense I can’t pay off in full by the time my bill comes due (unless it’s an emergency and I really have no choice).

But if you use credit cards carefully, they could do you a world of good. So the next time you’re inclined to reach for your debit card, you may want to grab your credit card instead.