PerkStreet Financial

David Seaman is a personal finance reporter based in New York and creator of the blog Credit Card Outlaw.

As PerkStreet’s CEO has explained, “The average person spends 17% more using a credit card than with debit or cash.”

But saving money isn’t the only reason why many folks love their debit cards these days. We asked around to see what everyday people like most about debit.

Daria likes how debit cards don’t allow her to go further into debt. “I exclusively use debit cards now as I had gotten into debt and decided that the best way to manage that was to spend only what I have,” she explained.

“I can do just about everything with them except one thing — rent cars. I use it to keep up with my budgeting and get alerts sent to my cell when I go above or below thresholds. I hardly use cash at all,” she told us. (For the record, you can certainly rent a car using your debit card; just make sure you have enough in your account to handle any temporary hold the rental agency may place on your account. This is typically no more than a few hundred dollars, but ask the agency about their specific policy, as it will vary.)

Taraneh loves the fact that debit cards are not, well, filthy. Whereas paper currency can be: “Cash is dirty (do I really want to know where that dollar has been?), and it’s not safe. If you’re carrying cash, and you’re mugged, that money is gone. But if you have your debit card, the bank will usually help you get your money back (if, that is, any is spent before you call to cancel the card). Also, if you make a purchase, it’s easy to find it and categorize it with your debit card.”

To be fair, most of the cash I encounter is fairly clean looking. But she has a solid point when it comes to tracking your finances and categorizing purchases.

For some, debit cards are most attractive because of the convenience factor. For Ornella, that is certainly the case: “I enjoy the convenience of a debit card. In most cases, I don’t need to carry cash. If I lose cash, then I lose my money. If I lose my debit card, then it’s a quick call to my bank to restrict (or as my bank calls it, terminate) the usage of my card. I don’t need to stuff my wallet with cash if I have my debit card. I prefer it over a credit when making my everyday purchases because it will be deducted from my account; however, with a credit card I have to pay it off and, knowing me. I might sometimes forget that I made a $5 purchase at Starbucks on my credit card!”

If you forget an outstanding balance on your credit card, those interest charges can pile up — and late fees or a 29.99% default APR can be painful. That isn’t an issue with a debit card; with a card that has rewards, the only thing that can add up is your cash back or air miles.

What’s your reason for preferring debit over credit?

Related posts:

1. Psychological traps that make even responsible people spend more on credit cards (Part I)
2. From Credit Card Nation to Debit Card Nation
3. Debit or Credit? But it’s a Debit Card!