When is a Debit Card better than a Credit Card?

edited 30 November -1 at 1:00AM in Credit Cards
13 replies 1.7K views
FingerbobsFingerbobs Forumite
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edited 30 November -1 at 1:00AM in Credit Cards
Just read a post in another thread from a user who prefers to use a Debit Card in hotels, because they seem to think this reduces the risk of the hotel trumping up additional fees to charge to the card.

I didn't understand the logic behind that statement, but it set me thinking - is there ever a scenario where using a Debit Card would be preferable to using a Credit Card?

I can think of only 3 reasons I would ever choose to use a Debit over a Credit Card: (1) if the merchant doesn't accept credit cards for a particular payment, (2) if I have insufficient available credit, or (3) if the transaction would be treated as "cash" and hence attract fees and/or interest if paid with a Credit Card.

Are there any others?
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Replies

  • zx81zx81 Forumite
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    When it's someone else's. :)
  • eskbankereskbanker Forumite
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    (4) availability of cashback at till
    (5) perks and benefits from provider (e.g. TSB contactless promotion)
    (6) differential surcharges (no longer applicable in UK!)
  • IamzeeIamzee Forumite
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    Credit cards incur interests since you owe money. Debit is the opposite hence you don't incur interests. I think that's the simplest understanding and you are correct. Sure merchants would want cash but when you talk about banks they prefer that you lend money so they can incur interests.
  • PeacefulWatersPeacefulWaters Forumite
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    Iamzee wrote: »
    Credit cards incur interests since you owe money.
    Unless you have a 0% deal or clear your balance in full.
    Debit is the opposite hence you don't incur interests.
    Unless you're overdrawn.
    I think that's the simplest understanding and you are correct. Sure merchants would want cash but when you talk about banks they prefer that you lend money so they can incur interests.
    The word is interest.
  • agrinnallagrinnall
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    Iamzee wrote: »
    Credit cards incur interests since you owe money. Debit is the opposite hence you don't incur interests. I think that's the simplest understanding and you are correct. Sure merchants would want cash but when you talk about banks they prefer that you lend money so they can incur interests.

    I have 4 words for you: full balance direct debit.
  • I use my credit card virtually everywhere and very rarely use my debit card - I used to use my debit card when booking flights to avoid the extra charge of using credit card, but that's a thing of the past now thank goodness. I've had many credit cards, have always paid them back in full every month and never paid a penny interest - and as I always get cashback cards (plus a few that gave away goodies like Amazon gift cards when you took them out) I've made thousands of pounds from them over the years.
  • HerbalusHerbalus Forumite
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    Pendant alert re (1). You cannot choose a debit card over a credit card if the retailer does not accept credit cards! You have no choice...

    The hotel issue is strange. You can pre authorise a debit card and it blocks funds in your account (your own money) whereas on a credit card it blocks up credit (not your own money).
  • I don!!!8217;t see the reduced risk of additional hotel charges thing to be honest, happens on both.

    Credit card has potential Section 75 benefits for important purchases.

    Credit card all the way and id opt for MasterCard myself due to their dispute processes being more favourable to the customer (in my opinion).
  • chattychappychattychappy Forumite
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    agrinnall wrote: »
    I have 4 words for you: full balance direct debit.

    Or how about just 3? Pay in full?
    Herbalus wrote: »
    Pendant alert

    Pedant alert: It's pedant alert!
  • HerbalusHerbalus Forumite
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    Haha irony noted. Fat fingers.
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