Here are all of the disadvantages of using a debit card.
1) Doesn't establish or build credit - Especially for younger people, you are making a mistake not beginning your credit history early that will help you out in the long run when you need a mortgage or an auto loan. You can start out with a card with a $300 limit or sign up for a secured credit card
2) Less fraud protection than a credit card - you can still be liable up to a certain dollar amount for an unauthorized purchase, with a credit card its always $0 (if in a reasonable timeframe)
3) Your card is directly connected to your bank account - if your PIN is fraudulently obtained, someone can drain your checking account and it can take a long time for it to be investigated and the funds returned
4) Your PIN is not added security - if your card is stolen, it can still be used WITHOUT your PIN at the register
5) Generally less rewards compared to credit cards - While some debit cards offer cash back, they will not be on tier with double cash back credit ards such as Citi Double Cash that have no annual fee. 90-95%of people should not have a credit card with an annual fee to begin with.
The only advantages a debit card have over credit/cash is for someone financially irresponsible that can't control any of their spending (which in some instances can still overdraft your account and leave you on the hook for a $35 fee) and that your card can be cancelled if lost versus cash.
TL:DR - Use a credit card with good rewards, no annual fee, and use an ATM only card instead of a debit card.
Feel free to put comments or your thoughts below!
Submitted January 20, 2020 at 06:39PM by ValuableService10 https://ift.tt/2NM6KRI
