They have stricter time frames for reporting fraud, which could leave you liable for substantial losses if you wait too long to report unauthorized use. In practice, though, your bank will likely refund any unauthorized charges as long as you notify it promptly of a lost or stolen debit card.
But it could take weeks to get your money back. And some debit card issuers offer additional protections. Skip to header Skip to main content Skip to footer. Home Basics. Think Twice About Applying for Credit. Most Popular. Tax Breaks. Best private student loans. Average student loan debt. Average college tuition. How to choose a student loan. How to pick financial aid.
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Personal Finance Insider researches a wide array of offers when making recommendations; however, we make no warranty that such information represents all available products or offers. Personal Finance. David E. Using a debit card instead of a credit card is a surefire way to avoid credit card debt. However, it opens the door for a lot of headaches if your card is ever stolen. Between building your credit history , protecting your checking account from unauthorized purchases, getting a few major consumer protections, and getting rewards, there are a number of reasons to use a credit card instead.
If you make sure to spend within your means and pay off your balance in full every month personally, I pay it off every time I get a paycheck , you'll avoid paying interest fees, as well as debt. See Business Insider's list of the best rewards credit cards you can get » Credit card debt is something you should avoid — with rare exceptions — but that doesn't mean that you should avoid using credit cards.
The important thing is to use your credit card as if it were a debit card. Popular Articles. Best travel credit cards. Best cash-back credit cards. Today's year mortgage rates.
Annual Fee. Regular APR. Credit Score A tooltip Recommended credit score. Note that credit card lenders may use many different variations of credit score models when considering your application. A five pointed star A five pointed star A five pointed star A five pointed star A five pointed star. Editor's Rating A tooltip Our editor's ratings are primarily based on 3 things: simplicity, affordability, and value. When you use a credit card to withdraw cash, it's considered a cash advance , and you're immediately charged interest on the transaction often more than if you just carry a balance month to month.
Most financial experts warn against cash advances as they can be very expensive. If you use an in-network ATM to withdraw cash with your debit card, the transaction will be free. If you're in a pinch and use an out-of-network ATM, you'll likely get hit with a transaction fee from both your bank and the ATM provider.
This can be expensive, but not nearly as much as when you use a credit card to withdraw cash. There are some banks that offer to refund a certain number of out-of-network ATM fees each month, quarter or year, like Ally and Alliant. Many retailers offer the option to add a cash amount for withdrawal to your purchase at the point of sale when you use a debit card. If you're in a situation where you need cash and can't find an in-network ATM nearby, Ted Rossman, senior industry analyst with Bankrate, recommends popping into a retailer and making a withdrawal with purchase to avoid the ATM fees.
Although this strategy can save you money on transaction fees, you must have the funds available in your checking account to cover both your purchases and the additional cash amount added to your sale.
If you overspend, you may be assessed overdraft fees by your bank. Check out Select's list of the best checking accounts for travelers. Some small businesses, online retailers and restaurants will impose a surcharge when you use your credit card to make a purchase, but will exclude debit cards from such fees. Also, you may want to consider using a debit card rather than a credit card when making an international purchase if you have a credit card that charges foreign transaction fees.
Before you travel abroad, double check to see which fee is lower. Most major issuers also let you generate reports to see how much you've spent in different categories in a given month, or for the year to date, or for a period you specify:. Spending report on a Chase credit card.
If you use a budgeting app like Mint or You Need a Budget, you can import data from your credit card and bank accounts. You don't need to have a credit card to have good credit, and you certainly don't have to carry a balance. But careful use of a credit card is the single best way to improve your credit scores, and good credit opens many doors.
It makes it easier to find housing, whether a potential landlord is checking your credit before giving you the keys or you're applying for a mortgage to buy a home.
Cell phone providers, insurance agents and utility companies also might use your credit history to determine your eligibility and even your rates. It can even boost your chances of landing a job, as many employers run credit checks on job applicants. If you do have a credit card, making regular small purchases, keeping your balances low and paying your bills on time will improve your credit score over time.
When you'll have to pay an extra fee: Merchants pay processing fees every time you use a credit card. Most of the time, those fees are rolled into the merchant's prices, like any other cost of doing business.
But sometimes a merchant might pass the processing cost to you directly by tacking on an upfront surcharge or "convenience fee" for using your credit card.
In those cases, you'll probably want to pay some other way, unless your credit card rewards are high enough that they'd cancel out the surcharge. When you don't want the merchant to pay a fee: Similarly, you may want to avoid using credit cards with smaller merchants you especially want to support. They may appreciate it if you pay in cash or by check, because then they don't have to pay the processing fees. Even debit cards are better than credit cards from merchants' standpoint, because processing fees for debit cards tend to be lower than what they'd pay for a credit card transaction.
When you don't want to overspend: Some people have a hard time keeping their spending under control when they use a credit card. That five-figure credit card limit might make it hard to remember why you shouldn't buy that shiny object. If you're close to your credit limit or you're worried about racking up a high credit card balance, you may want to reach for your debit card or use cash.
There are a lot of great benefits for credit card users.
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