When it comes to using a debit card, there are always some negative aspects that you might not know about. Using a debit card instead of cash or a credit card has various disadvantages, especially if you use them frequently. Here are five reasons why using a debit card is worse than using a credit card or cash.
1. A debit card will not help you build your credit score, which is something a credit card can do. If you have a bad credit score then you know that rebuilding it takes time and requires you to make monthly payments on schedule to various people. When you use a debit card, you do not rebuild your credit score because you do not have to make monthly payments. A credit card usually will require you to make a monthly payment and when you do this on schedule, you can help rebuild your credit score. Some people might not worry about their credit score but for those who do; a debit card will not help you increase your score. Using a credit card is a great way to help you increase your credit score because you are making purchases on a credit. A debit card does not help you when it comes to increasing your credit score which is a pretty obvious deterrent to use them. If you want to rebuild or increase your credit score then using a debit card is not the best idea.
2. If you use a debit card to make a purchase then you are probably missing out on the warranty benefits that might be available. A lot of credit card companies offer a warranty benefit if you purchase something using their credit card. Often times, the warranty benefit will double the warranty from the manufacturer for up to a couple years. When you are using a debit card, rarely is this type of service offered upon the purchase. If you buy a lot of electronics or expensive equipment then you know that a warranty is a good idea to get and it helps when someone offers you an extended warranty for nothing. A debit card will often not have these types of offers so you will miss out on what the credit card company would give you.
3. Using a debit card is worse than cash because they are often easily misplaced. A debit card is a small thin piece of plastic that could very easily fall out of your wallet if you are not careful. When you use cash you are probably more careful before you set your wallet or where you have set your purse. When you make a purchase at the store with a debit card, it is quite possible that you might leave the debit card behind the counter. Using a debit card requires you to pay attention at all times, especially when you have it out making a purchase. If you are using cash then you are more apt to remember where you placed it and not leave it sitting around. If you are someone who often misplaces your keys then you probably do not want to get a debit card for the same reason.
4. Often times you are penalized if you made more than a certain number of purchases on your debit card in a month. A lot of companies will penalize you if you make more than a certain number of withdrawals at the ATM per month. There are also companies that will charge you a fee. If you use your debit card more than five times a month. These small fees for using your debit card frequently can add up to big money quickly. A debit card is great, to make purchases with, but not if you are making purchases all the time. You have to read the fine print in your user agreement to find out whether or not you will be penalized or charged for using your debit card frequently. If you carry a credit card then you most likely do not get charged or penalized for the number of purchases you make in a month. Carrying cash is also a great way to eliminate the fee you might incur for excessively using a debit card.
5. The rewards you can get with a debit card are also not as good as a reward you might get with the credit card. Very few debit card companies offer reports, and most of the time they are not valuable or worthwhile. A lot of companies who offer credit card rewards make them worth while and you might even get some great deals. Some credit card companies offer cash back, where small percent of your purchase will come back to you as cash. There are also programs on your credit card that might allow you to save up for frequent flyer miles, which you can not get on a debit card. When it comes to the variety of services and rewards, a debit card usually lacks the value of what a credit card has. If you use your card a lot to make purchases and are looking for some good programs then a credit card would work better for you. Debit cards often are simple and do not have many of the types of programs a credit card has available. The credit card programs will depend upon the company your credit card is through, but most credit card companies have several different reward programs to choose from. Using a debit card will most likely prohibit you from gaining the rewards which is something you might be interested in joining.