Here’s Why You Should Never Use a Debit Card, According to Codie Sanchez
Written by
Gabrielle Olya
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Molly Sullivan
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Many money experts, including Dave Ramsey, have long preached about the dangers of credit card use and have advocated for always using a debit card. But Codie Sanchez, entrepreneur and founder of Contrarian Thinking, doesn’t agree.
“You should really never be using debit cards,” she said on the “On Purpose With Jay Shetty” podcast.
Here’s why Sanchez isn’t a fan of debit.
Weaker Fraud Protection
Credit cards can offer better fraud protection than a debit card.
“If somebody steals your debit card and goes and charges things, the bank goes, ‘I don’t know, that’s your money. Don’t really care,'” Sanchez said. “If they go and charge a bunch of things on your credit card and there’s fraud, what do you do? Two clicks, they erase it. They ship you a new card.”
No Credit-Building Benefits
It’s very difficult to boost your credit score without using a credit card.
“Good credit, in this country, is the underpinning of wealth,” Sanchez said. “Debit cards do not allow that.”
Having a good credit score allows you to qualify for lower rates when borrowing money, makes you more likely to be approved for loans, gives you access to higher credit limits, gives you access to premium rewards cards, helps you negotiate better rental terms and may even improve your employment opportunities.
No Rewards or Perks
Many credit cards offer rewards and perks — something you don’t get with debit cards.
“They don’t give you any points or perks or cash back,” Sanchez said.
When used responsibly, these points and perks can save you money.
When Credit Cards Can Backfire
Although Sanchez believes that credit cards are typically the better choice, she does acknowledge that there are ways to use credit cards that can be harmful to your finances.
“Credit cards are bad if you don’t pay off your payment every single month, if you allow big interest rates to stockpile, and if you use them as a ‘I want things’ as opposed to ‘I need things,'” she said.
However, when used responsibly, credit cards can offer many advantages you won’t get with debit.
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