The holiday season is approaching and you know what that means — spending money. Whether it’s buying gifts for loved ones or booking flights to travel home, the holiday season typically means a spike in spending for many of us.
And, because you may spend more than at other times of the year, you’re probably going to use credit cards. But, did you know that while credit cards offer some cool rewards like cash back, using your debit card is often a wiser choice? Read on to learn why.
1. You spend only what you have
Everyone wants to think they’re responsible with credit and only buy what they can afford. Well, a lot of people are wrong. According to a 2017 study by Magnify Money, 68 percent of consumers attributed their holiday debt to credit cards.
Of the consumers surveyed, 44 percent racked up more than $1,000 and five percent accumulated more than $5,000 in credit card balances. More disturbing is the fact that half of those consumers noted that it will take more than three months to pay off the debt they accrued during the holidays. That’s more than a quarter of the entire year!
When you use a debit card, however, you spend only what you have in your bank account. And, this helps you become more mindful and realistic about your budget. Using a debit card during the holiday season can also help you avoid fees and that dreaded holiday credit card debt.
2. You don’t have to worry about making another payment
The holiday season can make the most organized person run around like a headless chicken. Everyone’s schedule seems packed to the brim and there’s always something else added to the to-do list (Think: “Buy white elephant gift for the company party.”)
When you’re so busy, some of your normal day-to-day duties can fall to the wayside. And, if you don’t have auto-pay set up, you can potentially miss a credit card payment. Another common problem during the busy holiday season: You say you’ll “do it later” and then when you remember to pay your bill, it’s late.
When you use a debit card, however, you don’t have to add anything else to your to-do list – including making yet another payment. The money comes straight from your bank account and you don’t have to do a thing.
3. A debit card is free to use
One of the biggest perks with using credit cards is the rewards, like cash-back and airline miles. But oftentime the best rewards cards come with an annual fee and the conversion on the rewards isn’t as great as you think. In many cases, miles are literally worth about a penny per mile or less.
So, you may actually be spending your money on an annual fee, high interest rates, late fees, and more – without getting much in return.
Here’s where debit cards take center stage. Debit cards are free and can help you avoid debt.
4. Your debit card can help you save
At Chime, we’re all about helping you save money when you spend money. It’s all about balance. Am I right?
With this in mind, check out Chime’s round-up savings program, where every time you use your debit card, we round-up the purchase to the nearest dollar and put it into your Savings Account. This way you can effortlessly save and know that you’re being financially responsible at the same time.
5. Stop fraud instantly
There are no two ways about it: Fraud can be rampant during the holiday season. A lot of credit card enthusiasts think this is a solid reason to use credit over debit.
But, your debit card can offer protections that are similar to your credit card. For example, if you suspect any fraudulent uses on your Chime card or your card goes missing, you can simply go into the app and immediately put a halt on purchases by disabling transactions. No need to stay on a long customer service line (who wants to talk on the phone?!) and no need for lengthy emails. Just put a stop to it, now.
Not only that, but Chime alerts you any time you use your debit card. So, if your debit card get into the wrong hands, you’ll know right away.
The holiday season should be a time of joy and fun, not stress and debt.
Using debit instead of credit can help you keep your spending in check, plus you’ll have one less thing to worry about. So, this holiday season: Try spending only what you have and enjoy the season with family and friends. It sure beats worrying about money!