Appearances can be deceiving. Debit cards and credit cards look identical, and even their names differ by only a couple of letters. But when you look past the similarities, you’ll find a number of significant differences in how they function.

Debit cards are linked to your bank account, so withdrawals are processed immediately, while credit cards allow you to pay over time. So how do you know which option to use? Here are six major reasons why a debit card may be the preferred choice.

Reasons To Use A Debt Card Instead Of Credit Card

  1. You’re less likely to run into financial difficulties with a debit card.

The obvious advantage to using a debit card is that you’re drawing on existing funds, so you have to practice restraint. Since credit cards don’t involve an immediate outlay of cash, it’s easy to rationalize overspending by thinking you can pay it off “someday.”

  1. You’re already over your head in debt.

Continued use of credit cards when you’re already deeply in debt is like pushing a rock uphill: you’ll never get ahead. When you stick with debit cards for everyday purchases, you can budget payments to chip away at your debt more quickly.

  1. Debit cards give you interest-free access to cash.

Cash advances from a credit card sound great in theory. The reality is that they’re a triple whammy:

  • Lenders charge an up-front fee
  • Interest rates on cash advances are higher than those for credit purchases
  • There is no grace period on cash advances, so the interest clock starts ticking immediately

With debit cards, you may incur a small fee if you use an ATM outside your network, but there are no other charges attached.

  1. You can sometimes get a discount from small businesses.

Merchants and vendors are charged fees for accepting any electronic forms of payment, but they’re steeper for credit cards than they are for debit cards. The business owner has to make up that expense somewhere, so if you pay with a debit card they may pass the savings along to you.

  1. You can get better exchange rates during international travel.

Are you heading out of the country for work or pleasure? Debit cards usually offer better exchange rates than credit cards, and some lenders forgo foreign transaction fees that often accompany credit card purchases.

  1. Uncle Sam prefers debit cards.

If you owe the IRS, debit card payment is the way to go. Federal, state and local governments will charge a convenience fee for credit card payment that amounts to a certain percentage of the amount, but debit card payments incur a flat $2 to $4 fee at most.


Daniel R. Gamez, an attorney focusing exclusively in debt relief, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego, CA. For more information, please contact Daniel Gamez at 858-217-5051, or use our online contact form. Stay updated with the latest debt relief tips by following on Facebook and Twitter!