3 Situations Where You Should Use Credit Instead of Debit
Debit or credit? It’s not always an easy decision, but it should at least be an informed decision whenever you have to choose. For example, in these 3 situations, you should always use your credit card for best and safest results:
When You’re Making a Large Purchase
Your credit card may have many perks that you’re overlooking, and one of those perks could involve extended warranties. Lots of credit cards will actually extend the original warranty of your purchases, free of charge. So if you’re buying something big, like a large appliance, use your credit card and keep the receipt safe. If something happens to the item, your credit card company (namely American Express and MasterCard) may be able to help you out.
It can also pay to use a credit card on a large purchase if your card offers price protection. Some cards, like CitiBank, Discover and MasterCard, will have your back if the price for something you buy drops within 30-90 days of your purchase. If you spot the price drop and can prove it, these companies will usually refund you the difference in price.
When You’re Shopping Online
Shopping online at all involves some element of risk. But if you use your credit card, you’ll be more protected than if you used your debit card. With debit, the money comes out from your bank account immediately, so if there’s something wrong with your purchase when it arrives, there’s little that can be done on the bank’s end. A credit card can protect you in the event that something you ordered arrives damaged or incomplete.
According to Bankrate:
The Fair Credit Billing Act allows consumers to seek a refund from their credit card issuers for an unsatisfactory purchase. The charge must be at least $50, and the purchase made within 100 miles of your home. You also must have made an effort to resolve the matter with the seller first.
When You’re Looking to Repair or Build Credit
If you’re looking to build credit, you need to be using credit. Using your debit card gets you nowhere when trying to build or rebuild credit. So use your credit card – just make sure you pay it off in full each month to reap the benefits without suffering the consequences of debt.
Check out more helping credit/debit card tips!
