Personal Finance

I've Always Paid With A Debit Card, But People Say For $20+ A Credit Card Is Better. What's The Real Answer?

David Beren

Published: March 16, 2025 1:16 pm

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Trying to decide how to pay for something every day can be a real challenge, considering you have the option of cash, check, credit, or debit. This debate has been raging for decades, as some still believe that “cash is king” and can’t be convinced otherwise. 

One Redditor is considering this scenario as they try to determine whether it’s better to use a credit or debit card for purchases over $20. Posting in r/personalfinance, there is also a question about whether switching to a credit card will also be more helpful in establishing good credit. 

Understandably, many people struggle with this question early on in their lives because they want to be financially secure, so I commend this Redditor for being practical and researching. 

The Redditor’s Question 

The Redditor currently uses a Wells Fargo debit card to purchase everything, even though they have a rarely used credit card. Ultimately, they are asking whether they should switch to a credit card in an effort to build up credit, rack up frequent flyer miles, etc. 

Of course, there is also some confusion about how much having a credit card affects your credit score, which more people should be educated on. One concern that has prevented some credit card use is the Redditor’s understanding that some retailers, especially smaller ones, could charge a 2-3% fee to cover their credit costs. In contrast, debit cards don’t have any fees.

Also complicating things in the Redditor’s mind is that their existing credit card has a $4,000 balance, down from $8,000, which was used from college. This leads to a question of whether they should pay this off first? 

Just Use Credit

It won’t come as a surprise to learn that there are far more reasons to use a credit card over a debit card. This isn’t to say that debit cards don’t have a place, but the reality is that credit cards are more secure, have more benefits, and can build your credit. 

One Redditor put it best when they said, “Debit is my money, credit is ‘bank’ money. If something happens, which money do you think they’re gonna chase—mine or theirs?” While this is a bit of a brush-off saying that a bank won’t help if something happens with a debit card, there is definite truth to credit cards being more secure.  

If you happen to be a victim of credit card fraud, the amount of money you can be liable for is $50, according to the law. This said, most credit cards will immediately remove fraudulent transactions and work with law enforcement. The opposite is true for debit cards where you could be on the hook for everything if you don’t report fraudulent behavior within 60 days of a statement being sent out. 

Credit cards also offer perks like cash-back, which is basically “free” money from a bank. They also offer extended warranty protection, purchase protection, roadside assistance, frequent flyer miles, airline status, and so much more that debit cards cannot. 

The bonus is that using a credit card builds up your payment history and reports this to a credit card bureau, so there is an impact on your credit. For this reason, it is always recommended that you pay off a credit card balance every month. 

When Is Debit Better?

A debit card might be the smarter option if you struggle to pay off credit card balances. This way, you can only spend what is in your bank account. Alternatively, if you need to access cash quickly, a debit card is the best thing to have in your wallet. 

As the original poster suggests, avoiding merchant fees is also a benefit, but this will generally only happen at smaller businesses. Stores like Walmart, Target, and Publix don’t have any such fees. 

Ultimately, unless you really have difficulty balancing your budget every month or regularly overspend, a credit card will always provide more benefits and protection than a debit card. 

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.