Ah, the age-old question: should you use a credit card or a debit card for your daily transactions? While some folks may swear by one or the other, the reality is that both types of cards have their own merits and drawbacks. In this article, we’ll dive into the pros and cons of each, but let’s be real, my preferences may already be apparent.

Debit Cards: Debt-Proof or Drab?

Are you the type of person who hates the idea of going into debt? If so, a debit card may be your go-to. With a debit card, you can only spend the cash that you have in your bank account. This helps you stay on budget and avoid splurging on unnecessary items you can’t afford. Plus, with only one card to choose from, there’s no decision-making paralysis when it comes to making a purchase. Say goodbye to the hassle of juggling multiple credit cards and hello to a minimalist lifestyle!

But, as with most things in life, there are some downsides to using a debit card. For starters, online shopping with a debit card can be risky business. Hackers and identity thieves are always lurking in the shadows, waiting to snatch your sensitive information and drain your bank account. Plus, if someone makes unauthorized charges on your card, you may be held liable for the damages. And let’s not forget that debit cards rewards programs are either non-existent or limited incentives, making it a drab choice for those who love to be rewarded for their spending.

Credit Cards: Rewards, Rewards, Rewards

If you’re a fan of being rewarded for daily expenditure purchases–think grocery, clothing, utilities, etc. (not manufacture spend, that’s for another topic), then a loyalty credit card may be right up your alley. Many credit cards come with rewards programs that allow you to earn points or cash-back for your spending. You can use these rewards to travel the world, buy fancy merchandise (never recommended to trade valuable points for an apple product), or even offset your statement balance. It’s like being crowned as the royalty of cash-back shopping! Not to mention, using a credit card responsibly can help you build up your credit history, which can come in handy when applying for loans or mortgages down the line.

Of course, credit cards aren’t all sunshine and rainbows. They often come with high-interest rates, which can lead to some serious debt if you’re not careful. Watch out for balance transfer fees and late payment fees if you’re not staying on top of your payments. And yes, the “better” cards do have hefty annual fees but I argue that the benefits pay for themselves. And let’s not forget about the temptation to overspend – it’s easy to get caught up in the excitement of racking up points and rewards, but it’s important to remember that every purchase comes with a price tag.

Are you a current debit card fan but interested in dabbling in the credit card world? Start slow. Open one card and use it only for gas, grocery, perhaps medical bills, and other staples that you are normally shopping for. Continue to utilize the debit cards for clothing that may not always be a necessity, or other ancillary items.

What’s the Verdict?

At the end of the day, whether you choose to use a credit card or a debit card comes down to your personal preferences and financial goals. If you’re looking to build your credit score, earn rewards, or protect yourself against fraud, then a credit card may be the better choice. On the other hand, if you’re looking to stay debt-free, budget-conscious, or just want to simplify your life, then a debit card may be your best bet.

But who says you have to choose just one? Many people use both credit and debit cards, depending on their needs and situations. Honestly, I don’t recall the last time I pulled out my debit card (a big no-no in this industry, but hey, isn’t using credit cards the point of this column?) I mean, I’m not suggesting to open 30+ cards at once, but work your way up to maximize the bonus points per card.

Credit cards have helped me redeem 4 million+ points for dozens of free trips, including 100 round trip airline tickets and 112 hotel nights, all for free, just the cost of the credit cards’ annual fees (however the cumulative benefits greatly outweigh the fees).

In the end, the most important piece of advice is to use your cards responsibly. Set yourself up for credit card points success. Stay within a budget, pay bills on time and monitor your charges via the online account statements. With a little bit of planning and discipline, you can learn enough willpower to spend on credit cards within your means and be rewarded for your everyday shopping in the form of free cash back (receiving a physical check) or valuable credit/loyalty points and/or miles to travel. So, what’s in your wallet?

Atara, aka The Points Queen, is a former Wall Street executive who has transformed her passion for ecommerce and credit card rewards programs into a successful career. She also runs a consulting business assisting small businesses and individuals optimize their online presence and teach travel hacking concepts. Atara enjoys multiple free vacations each year thanks to her extensive collection of points and miles. To learn more, contact Atara at [email protected].