Here’s Why I Prefer Credit Cards to Debit Every Time I Shop

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When you reach the checkout counter in a store or want to buy something online, you have several options for how to pay. Cash, debit cards and credit cards are among the most popular choices, but for many savvy spenders, a credit card is their favorite way to pay—and I agree. My credit cards have given me back thousands of dollars in rewards and benefits, among other perks.

Why credit cards beat debit cards:

1. Credit cards offer generous fraud protection benefits.
2. Purchase protection and travel insurance secure your purchases.
3. Credit cards offer the most generous cash-back and travel rewards.
4. Credit cards are the best option unless they aren't accepted or you're worried about the temptation to overspend.

Recommended Credit Cards

Credit Card	Rewards Rate	Annual Fee	Bonus Offer	Learn More
Chase Sapphire Preferred® Apply Now	1x- 5xPoints More Info Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.	$95	60,000Chase Ultimate Rewards Points More Info Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. Dollar Equivalent: $1,380 (60,000 Chase Ultimate Rewards Points * 0.023 base)	Apply Now
Southwest Rapid Rewards® Plus Credit Card Apply Now	1x - 2xPoints More Info Earn 2X points on Southwest® purchases. Earn 2X points on Rapid Rewards® hotel and car rental partners. Earn 2X points on local transit and commuting, including rideshare. Earn 2X points on internet, cable, and phone services; select streaming. Earn 1X points on all other purchases.	$69	$400 statement credit + 40,000 pts.Southwest Rapid Rewards Points More Info Earn a $400 statement credit and 40,000 bonus points after spending $3,000 on purchases in the first 4 months from account opening. Dollar Equivalent:	Apply Now
Wells Fargo Active Cash® Card Apply Now Rates & Fees	2%Cashback More Info Earn unlimited 2% cash rewards on purchases.	$0	$200Cash Bonus More Info Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.	Apply Now Rates & Fees
Citi Custom Cash® Card Apply Now Rates & Fees	1% - 5%Cashback More Info Earn 5% cash back on purchases in your top eligible spend category each billing cycle, up to the first $500 spent, 1% cash back thereafter. Also, earn unlimited 1% cash back on all other purchases. Special Travel Offer: Earn an additional 4% cash back on hotels, car rentals, and attractions booked on Citi Travel℠ portal through 6/30/2026.	$0	$200Cash Bonus More Info Earn $200 in cash back after you spend $1500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® points, which can be redeemed for $200 cash back.	Apply Now Rates & Fees

Here’s a look at the many reasons credit cards are better than debit cards.

Fraud Protection and $0 Liability

With a credit card, if someone steals your card or card number and uses it without your permission, call the issuer as soon as possible to let them know about the fraud. If you do, you won’t be liable for a penny of unauthorized transactions. Your credit card company simply removes the fraudulent purchases from your statement or balance.

For example, my wife had fraud on her favorite credit card recently. The issuer sent her a message when it detected the fraud, and a quick phone call to the bank wiped the transactions from her statement.

When you shop with cash, you have virtually no protection if something goes awry. Debit cards offer some level of protection but still have some risk of fraud. You may be liable for some charges and any fraudulent purchases that drain your bank account. That can put you at risk for overdrafts, missed bills and other challenges.

Purchase Protection and Extended Warranty Benefits

Major credit card benefits vary by card, but there are some valuable protections to look for when picking a new card:

• Purchase protection: If offered by your card, this benefit insures new purchases for around three to six months from the purchase date. If the item is damaged or stolen (but not lost), file a claim with your card’s benefits provider and a repair or replacement should be covered in full. Certain claim, annual and card lifetime limits may apply.
• Extended warranty: Extended warranty benefits typically add an extra year onto existing manufacturer warranties of three years or less. I made a claim a few years ago when my robot vacuum stopped working about a week after the one year warranty expired.
• Cellphone protection: Some cards offer cellphone protection if you pay for the phone with your eligible card. I have this benefit from my business credit card and recently made a claim after my phone fell and the screen cracked.

Travel Insurance for Every Stage of Your Journey

Many travel rewards cards include travel insurance benefits that can be worth a fortune if you ever need them. Here’s a snapshot of some travel benefits to look for:

• Trip cancellation/interruption insurance: This benefit covers changes to flights or a hotel room if your trip is canceled or interrupted for a covered reason, which typically includes weather and illness. Many of the best travel rewards cards offer this perk.
• Trip delay insurance: If your trip with a common carrier, which includes major airlines, is delayed and you get stuck in an airport for a minimum length of time, often six hours, benefits kick in that cover meals and other costs.
• Baggage delay insurance: If your bags are delayed, this coverage will pay for toiletries, clothing and other needs to get you by until your bag shows up or you reach the insurance limit.
• Lost baggage insurance: On rare occasions, airlines, cruise operators, bus lines and train companies lose your checked bags. Keep your claim tag, as you might need it to get reimbursed. Like other coverage, limits apply.
• Rental car damage waiver: Worth around $10 to $20 per day when you rent a car, rental car damage waiver or rental car insurance from a credit card allows you to skip paying for expensive insurance at the rental counter. If the car is stolen or damaged in an accident, insurance from the card will pay for up to the full value of the vehicle.

Card Issuers Protect You From Bad Service and Products

If you make a purchase and the product or service doesn’t live up to the seller’s promise, a credit card’s dispute process is an important protection.

A few years ago, my wife placed a catering order with a major restaurant chain. As bad luck would have it, their power was out and they couldn't deliver. After weeks of calls and failed promises for a refund, we put in a dispute with our credit card. The issuer credited the amount back to our card and we never had to worry about it again.

My mom and sister had to file a dispute after a far worse experience with a tour operator overseas. Had they used a debit card or paid cash, they likely would have never gotten a dollar back after a serious bait-and-switch. Because they paid with a credit card, however, they filed a dispute and got their money back promptly.

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Travel and Cash-Back Rewards

Cash-back and travel rewards are often worth up to 5% of the purchase or more when you use a premium rewards card. Some rewards cards charge annual fees, but they may be worth it when the rewards add up to more than the cost.

If you earn hundreds of dollars per year in cash back or free flights, for example, it could be worth more than an annual fee in some cases. I’ve used rewards for thousands of dollars in free travel over the years. In fact, I’m writing this article sitting on a Southwest flight that I paid for using rewards points. I only had to pay about $12 out of pocket for the round trip.

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Use Your Credit Card But Don't Carry a Balance

I can’t count the number of times I’ve used credit card benefits over the years since getting my first card in college. My cards have saved me from fraud and bad purchases, and opened up the world with travel rewards. However, one time when using a credit card is a bad decision is if you can’t pay it off in full by the monthly due date.

When you pay your bill in full and on time, you won’t have to pay any credit card interest. If you carry a balance for any reason, including spending more than your budget allows, credit cards can be a very expensive proposition.

Don’t make the costly mistake of racking up big credit card bills you can’t afford. The rewards are not worth it. But if you can pay it off in full every month, then you should use your credit card for every possible purchase. The benefits and rewards will work in your favor.

Compare the Best Rewards Credit Cards

Figuring out which credit card to start with can seem intimidating since there are so many great options out there. That being said, you want to pick one where you’ll receive a higher chance of approval.

You'll also want a card that offers rewards you feel are worth it. Our comprehensive guide of the best rewards credit cards can help you compare cards and find the right fit.