You feel the need to take out a short-term loan for your soda purchase?
The fact that a debit card isn't considered as good as (and further, that it's not assumed to be better than) a credit card is yet another bit of money horror.
The way the credit card system is setup is what it is. If you know what you are doing you can take advantage of it.
One should almost never use a debit card, as if it gets compromised the money comes directly out of your account and the banks don’t have much incentive to help too much.
With a credit card, that stolen money belongs to the bank, and therefore they have a big incentive to get it back, so using this kind of card allows you to wield the power of a large company for your benefit. As long as you pay off the full bill every month, you are getting this protection for free.
Perhaps this is regional thing, but in my country I get exact same level of protection for both credit and debit cards. Regulatory pressure can be useful at times.
It’s a free loan for a short period, and if you don’t settle timely due to your own impulses to over “borrow”, you incur high interest, and only then do these loans become a problem.
Otherwise there’s no reason not to use a CC instead of debit. It can even be life saving if you’re slim on the savings and are smart with your CC usage and settlement.
> if you can pay the full balance every month then there's no reason to not use one
And if the alternative is using a debit card, then by definition you can pay the full balance every month, because the money has to be there in your bank account before you can spend it with the debit card anyway. It's the same money either way, the only difference is whether it comes out of your bank account in little increments over the month or in one big chunk when you pay your monthly bill.
The reason credit cards exist - and why Visa and Mastercard are worth $800 billion - is that people, on average, do not manage their money effectively enough to come out ahead. Their average customers come out so far behind, instead, that the credit card companies can afford the occasional default and they can afford to offer rewards and the automatic 0% interest loans to try to entice more customers.
Yes, I understand that, but that doesn't change the fact that if you are able to manage your money effectively (and if the alternative is using a debit card, you are, since, as I noted, the money has to be there in your bank account anyway), then you can take advantage of the credit card's benefit of not giving anyone direct access to your bank account, as a debit card does.
In the US, if someone fraudulently uses your debit card they can clean out your bank account, possibly with no recourse. With a credit card you're only liable for $50.
Debit cards are a dumpster fire in my opinion, at least if you own a car.
When you use a debit card to buy gas they put a hold for a few hundred dollars, as if you were filling up the side saddle gas tanks of a huge pickup truck at $6 a gallon instead of filling up a compact. The holds last for days instead of the one minute it takes for me to fill my Honda, or the ten minutes it takes somebody to fill an Escalade.
If it works at all, you can go on a road trip and wind up with enough holds that you have overdraft fees, bouncing checks, fees because you wrote bouncing checks, late fees because of payments that failed, etc.
The "short term loan" from a credit card is not a rip-off, but it means you are laying off risk on them.
If somebody steals your debit card number then they can clean out your bank account and you have little recourse. When I did have my debit card number stolen the bank told me that I had to be careful because they could only change one digit in the number because the rest of it was based on my bank account number.
I told them to turn off debit card transactions on my ATM card.
I've never had a hold on my debit card filling up at a gas station. I've had a hold when I've booked hotel rooms, and I've had to put down a deposit when renting a car with it, but that's the only hassle I've had. Midwestern US, banking with a local credit union.
Well, the other credit building options are much less accessible: mortgage, car, personal, etc loans. I would say credit card loans are the easiest/most accessible to individuals to start building their credit.
The fact that a debit card isn't considered as good as (and further, that it's not assumed to be better than) a credit card is yet another bit of money horror.