Ask an Expert: Debit or Credit?

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I review dozens of credit card offers each week to find the best deals. Check out more on our credit card page. Have a question? Email me.

A Money Talks News reader recently wrote…


I just read your article about Deborah and her debit card. My husband and I only use our debit card. We have excellent credit. I have read many articles about how a debit card offers no protection against fraud and credit cards do offer this protection. We’re thinking we need to get a credit card and not use the debit card any longer. We buy everything on the debit card. Very seldom do we pay cash.

So to protect ourselves from someone writing down our number and buying some expensive trip or something, we want to get a credit card. Am I getting the correct information? What would be a good card for us? We don’t fly anywhere very often, so I thought a cash-back card would be best.

I would appreciate any help you can give me.


Thanks for the question, Mary.

I wouldn’t say that debit cards offer no protection against fraud. If someone steals your debit card number, you should be protected by your bank. For example, Bank of America says, “If your card is lost or stolen, Bank of America credits you back for any fraudulent card transactions up to the amount of the loss, when reported within 60 days from statement date.”

Then again, it can be a chore to get those charges removed – as Money Talks News writer Brandon Ballenger learned in What Happened When My Identity Was Stolen.

Credit cards offer several more layers of protection against fraud and errors. (See 5 Reasons Not to Worry About Credit Card Hacking.) For example, if you authorize a charge to your debit card but the merchant fails to deliver, you’re no better off than if you had paid with cash or a check. On the other hand, a credit card lets you “charge back” the transaction if the goods or services never arrive or aren’t as the merchant described. (See Chargeback: Your Secret Weapon Against Unscrupulous Merchants.)

Finally, credit cards are more easily accepted by hotels and rental card companies. Try to rent a car or a hotel room with debit card – you’ll be asked for a sizable deposit.

Which card should Mary get?

With her excellent credit, Mary could qualify for any card on the market. Since she has cash-back rewards in mind, I’ll pass along a couple of my favorite cards.

First, try the Blue Cash Preferred Card from American Express. It offers 1 percent cash back on most purchases, with 3 percent cash back at gas stations and department stores – and 6 percent back on groceries.

But for the highest cash-back rate on all purchases, the Fidelity Rewards American Express leads the market. This card returns 2 percent of your spending as a deposit that goes directly into an eligible Fidelity account, with no annual fee.

The best thing about how Mary uses a debit card: She never went into debt or paid any interest. I’d strongly encourage her to use a credit card in the same way. By always paying each month’s balance in full and on time, Mary can enjoy the added security of a credit card while avoiding interest and earning rewards.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are the author’s and have not been reviewed, approved, or endorsed by American Express. This site may be compensated through the American Express Affiliate Program.

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