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Credit Vs Debit Cards: The Debate

credit card purchase

Millennials are struggling with the war of credit vs debit accounts. They prefer cash. And when they do carry a card, it’s more than likely a debit card. This is possibly due to the stock market crash of 2008, which they heard their parents worry about. There are pros and cons to both credit and debit, however, and millennials need not be so fearful of credit card accounts.

The pros of debit

  • No debt

Debit cards only let you spend what you have in your account, meaning that you can’t go into debt over purchases if you do not have the money. While there are cases of being slapped with overdraft fees, they rarely happen.

  1. No credit needed

To open a checking account a patron does not need credit.

  1.    ATM card

You can easily get cashback, or take out money from an ATM because the money is taken directly from your account.

The pros of credit

  1. Less risk

While debit cards are slightly more convenient, they have a risk. Credit cards have better protection than debit, overall. Your liability with a credit account is unlimited under federal law. Also, if a thief uses your debit card for a purchase, then that money is gone immediately. Whereas, with credit cards, you have more time to catch a mistake.

  1. Money when you need it.

While this can be a bit tricky, having funds available to make a purchase and pay it back later can be enormously helpful to your budget.

  1. Member perks

Some credit cards offer their members shopping bonuses. These perks include cashback options, as well as loyalty points and air travel miles.

Debit and credit cards both have their benefits. But debit cards are preferred by millennials since they are more user-friendly. Nonetheless, millennials need to become more credit card savvy, since debit cards have many disadvantages, too.

The cons of debit 

  1. Hidden fees

When paying for something with a debit card, you may notice that there is a service charge. This is normally a small but annoying fee for using a debit card. There are also annual fees, overdraft fees, reward program fees, point of sale fees, and the list continues.

  1. Lower fraud protection

If a thief gets ahold of your debit card, they can take out all the money in your account. And while credit card theft does happen, credit accounts are closely monitored to stop this. Purchases with credit are trackable. This makes it easier to identify theft.

  1. No credit building

Building credit is not possible with a debit card checking account. And good credit is needed for most financial decisions such as buying a car, a house or applying for an apartment. It makes more sense to pay your credit card bills in full by budgeting — and receive the benefit of credit building — rather than to continually use a debit card.

  1. No rewards.

Travel points, as well as free air miles, are not offered for debit card users. Come vacation season, those points and rewards are nice to have. There is a huge variety of rewards with credit cards, and most aim to give clients small rewards for utilizing their services.

There are risks with credit cards such as theft, and going into debt by not paying your bills. The fear of credit card debt is doing financial harm, rather than building quality personal economic skills, for millennials. Credit vs debit is not a completely one-sided argument with one clear winner. Both have their pros and cons. In fact, both types of accounts should be utilized in order to optimize your economic skills.


Yes, both credit card and debit card accounts have risks. But the hidden fees, lack of rewards, and credit-building should be taken into account before dismissing the use of credit cards. Millennials should not fear the credit system, and, through an adequate education in financial literacy, this irrational fear can be conquered. Credit cards are an important economic step toward true adulthood. The question of whether to use a debit or a credit card should be evaluated on an individual purchasing basis, and definitely should not be viewed as a question of which card is better overall all of the time.

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