Why Are Debit Cards Not As Good As Credit Cards For Personal Finance?

Credit card transactions involve not only your bank, but also the credit card issuing company, and are easily reversed if there is a dispute (e.g., defective item, shipped the wrong product, etc.). Credit card companies are usually very good at reversing charges, especially if there is fraud on a stolen card.

Debit cards are generally a much better option for personal finance for one simple reason: IT'S YOUR MONEY. While you may have to pay a small fee to use it, you don't have to pay interest to use your own money with a debit card.

Debit cards on the Visa or Mastercard system can be used anywhere that debit cards are used.

Merchants like them better too because they are charged lower fees when you use them.

Debit cards are increasingly becoming more popular nowadays. A recent survey conducted by the National Retail Federation found out that more Americans are relying on debit cards to pay for holiday shopping expenses.

While they may be useful, debit cards are also more prone to identity theft and security breaches. Credit cardholders are protected by federal law and cardholders only have to deal with $50 worth of unauthorized purchases. Debit cardholders, on the other hand, can lose "actual" money if their cards are compromised.

Nevertheless, consumers have the option to choose between credit and debit cards. Both cards have their advantages and disadvantages.