Switching from Debit to Credit?

**ashleyAMX** · Jan 23, 11, 8:42 am

First, I'd like to say this forum has been extremely helpful.

I'm only 20 and financially conservative (to an extreme). From reading a few posts I think I should try switching my purchasing habits from debit to strictly credit. Will this boost my credit faster?

I have three trade lines. Amex + Capital One + an auto loan. Would this be a good idea or not so much? Any suggestions?

**Cucumber** · Jan 24, 11, 2:11 am

Debit wont do diddly squat for your credit and if that's what you want then dont rely too much on debit cards.

It is good that you have revolving and installment accounts. i messed up by only having revolving for my first 2 yrs and then when I went to apply for an auto loan I was denied for having no installment.

**jeffysdad** · Jan 24, 11, 6:37 pm

You should absolutely be using credit as your first choice for payment for everything whenever possible as long as you pay off your balance in full and on time every month without exception and never exceed your credit limit.

Choose the rewards card that best complements the amount and type of spending you do. As long as you're comfortable with it, sign up to have your card paid in full automatically via a direct debit to your checking account on a date you select. Most cards will accommodate this. Monitor your card activity online to keep track of your spending and to detect any fraud at the first occurrence.

By using credit you will be helping your credit score. You also will be earning rewards such as cash back, gift cards, travel, etc. You will have greater protection as a consumer in the event an item you buy is faulty or a service you pay for is not fulfilled. Your cash will be protected in the event of fraud -- unlike with a debit card. You will get to float your debt for a month, earning interest on your savings until it comes time to pay the bill.

**Elliot Castro** · Jan 24, 11, 8:12 pm

You will get to float your debt for a month, earning interest on your savings until it comes time to pay the bill.

Well, for most card holders, this float savings is lucky to earn a couple pennies due to the economy and the horrible interest banks pay out.

**ashleyAMX** · Jan 29, 11, 1:39 pm

Originally Posted by jeffysdad

You will get to float your debt for a month, earning interest on your savings until it comes time to pay the bill.

That's a good point, I do have an Amex personal savings too. So, I could also gain 1.3% a month floating. What a really good suggestion.
Thanks! I'll be using BOA a lot less now.

**Mapleton** · Jan 31, 11, 9:42 pm

If you trust yourself and you are responsible, there is absolutely no reason to use debit cards.

Credit all the way. It's like getting an interest free 1 month loan plus cash back or points if you have the right card.

**cashnocredit** · Feb 1, 11, 1:15 pm

15 years ago I stopped using CCs and switched to debit cards. Big mistake. 2 years ago I didn't even have a FICO score and I wondered why my car insurance was so high. Duh. Having a credit record is important even if you don't run a balance.

**ashleyAMX** · Feb 1, 11, 6:14 pm

I had no idea credit scores can have an impact on your insurance, no wonder my insurance has been going down!

**bubblebusteconomy** · Feb 3, 11, 12:27 am

It's the other way around sweetheart. You need to be switching from credit to debit. Credit cards will lead you down a miserable road my friend.

**dmband** · Feb 3, 11, 12:33 am

Using credit instead of debit for ALL purchases we normally make has earned us $400 in free money in a year so if you find a good rewards card then I would say it's a good idea assuming you can handle the responsibility of using credit.

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