Is it worth it to use a credit card vs. debit?

[Frugal]

I use a debit card for most purchases. However, lately I am rethinking this, since i have heard that liability is limited to only $50 in most cases with a credit card if someone steals your identity, vs. pretty much full liability in some cases - with a debit card. What do you think? Is it worth it using a credit card for most small daily payments for this reason alone?

[KiwiJo09]

I think it depends on your bank. I use my debit card for everything. I know that if your identity is stolen, it is much easier to deal with it if you were using credit cards because usually the bank closes down the account for a few weeks. And if that's where you have all your money, that can be a big problem! However, I still use my debit card. If you use your debit card, just run it as credit and be sure to inspect that the credit card swiper doesn't look weird (like something of a different color sticking out).

[photo]

I don't know what the liability for a lost debit card is because I only use one to obtain cash from an ATM. Another problem, though, with a debit card, is that every time you input your PIN number, you increase the chance of someone else accessing your account. Gas stations are notorious for having skimmers on their pumps that record PIN numbers.

Other reasons I use a credit card:

Cash back. I've have received close to $1,000 some years.

Travel insurance. By purchasing a plane ticket on Visa, I receive automatic travel insurance, including lost luggage replacement.

Charity. The card I use most often donates a percentage of my purchases to charities of my choice.

Protection against merchants. If I make a purchase that is unsatisfactory and the merchant is giving me a hard time about refunding my money, my card refunds my account.

Free credit score. I've never paid for one.

Theft liability is zero.

Discounts that aren't available using debit.

Also, many merchants, especially hotels, don't take debit cards, so for me, a credit card is much more versatile.

[Nightfly]

I used to be a big cheerleader for debit cards, because they're like cash - which meant I couldn't rack up debt. However, now that I've become a bit more responsible with credit cards - I am starting to see their many advantages (including those mentioned by "photo").

Also, once upon a time we had DirecTV (which is borderline evil). Then we moved, and could no longer use DirecTV service. DirecTV was forced to cancel our account. Even AFTER our account was cancelled (or, at least, it should have been) - DirecTV essentially stole money from us. How? They had my debit card number. We got our money back, but not without a lot of hassle. (Side note: the DirecTV CEO made over $32 million last year. Legalized theft? You decide.)

NEVER use a debit card with anyone that can issue you a monthly bill.

[LMA]

You get both more protection and perks from using a credit card instead of a debit. However, the BIG risk with credit cards of course is that you begin to buy more than you can afford. So I would only reccomend you use a credit card if you know you have the money to buy what you are buying and you will pay off the statement in full every month.

If you can do that then credit cards are more beneficial. I have actually gotten back about $2,000 in cash over the last two years because I use my credit card in the way I have described. And yes, I have a balance of $0 on my card. Also, I only use on credit card. I don't see a need to have more than one.

[Gary Barzel]

The benefits of credit cards definitely outweigh that of debit cards, although there has been some improvement from debit cards. Used whatever is best for you though, meaning if you have debt problems and don't want to run into more of it, you should stick to using debit cards.

[bjl584]

Originally Posted by Frugal

I use a debit card for most purchases. However, lately I am rethinking this, since i have heard that liability is limited to only $50 in most cases with a credit card if someone steals your identity, vs. pretty much full liability in some cases - with a debit card. What do you think? Is it worth it using a credit card for most small daily payments for this reason alone?

You hit the nail on the head. If there is fraud with your Credit Card, you simply dispute the charges and don't pay the bill. With a Debit Card, if there is fraud, it may take weeks for your bank to clean up the mess leaving you with no money in your account in the meantime. Plus, you can choose a credit card that has some type of rewards. Most debit cards don't have this option.

[cypher1]

Originally Posted by bjl584

If there is fraud with your Credit Card, you simply dispute the charges and don't pay the bill. With a Debit Card, if there is fraud, it may take weeks for your bank to clean up the mess leaving you with no money in your account in the meantime.

This is pretty much what I tell my friends on the CC vs DC topic. I'm more paranoid of losing my DC and having all checking/some savings cleaned out immediately.

[JoshuaHeckathorn]

If you're responsible with your money and live within your means, you should be using a credit card for everything you possibly can. Credit cards not only provide greater protections than debit cards in the event of fraud or identity theft, but why miss out on the rewards you can receive for simply using the card? Even if you were to use a credit card simply for the limited liability, I still think it's worth it.

[naomibatac]

Personally, I still prefer credit cards over debit card for various reasons mostly have been discussed by photo, nightfly, and the others. The biggest risk with credit card is yourself. If you use your credit card properly and wisely, you will not encounter any problem. Although credit card fraud is rampant nowadays, there are still some safety measures that you can take to protect your credit card and yourself.
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Learn more about credit cards and how to handle finances: Credit Cards Helpline - All you need to know about financial products

[AvaBFM]

I use my credit card for everything! I have the cash in the bank, and pay off every month's bill in full. This way, A. I get points that I can redeem for cash (every bank is different, though)and to protect myself from the potential liability of identity theft, etc. Plus, it builds excellent credit!

[dojo]

Debit or credit, doesn't matter for me. I have ZERO OVERDRAFT though and this really helps. If the money is not in the bank, I can't pay