28
Apr

When is a Credit Card Better than a Debit Card?

Posted by Sara M. Varese

Due to the credit crunch, the number of credit transactions have been cut in half while debit transactions have more than doubled. And while it may be a wise decision for some to avoid spending what isn’t there by using a debit card, there are some situations where using a credit card is more advantageous than a debit card.

Credit Card Purchases Offer Stronger Purchase Dispute Protection

When goods or services are not delivered on satisfactory terms, the backup dispute protection offered by your credit card can offer the help that debit cards do not, especially on major purchases. Debit cards usually make it more difficult to get your money back in a dispute. Some credit cards may offer extended warranty and theft insurance protection as well. Check with your credit card for existing offers.

Gas Stations, Hotels, and Car Rentals May Put Holds on Debit Cards

To avoid being short-changed, gas stations, hotels, and car rentals may place an over-extending hold on your debit card.  So for example, let’s say you only want to stay at a hotel for 3 days and 2 nights, however, there may be a possibility that you stay over for say, 4 days and 3 nights, so the hotel will put a hold on your debit card for a certain amount, just in case.

Credit Cards Give Better Rewards

Debit cards are getting better at offering incentives for using their cards, however, credit cards give better perks in general.   Most credit cards give 1% cash back whereas Citibank’s debit card offers give about 0.31% cash back.

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