Debit Cards Won’t Help You Build Your Credit History

Posted by: Sally S. | Mar 08,2008

Debit cards often come with a checking account and can be a quick and easy way to pay for items at the supermarket or to withdraw cash from your checking account in a jiffy. However, there some ways that debit cards won’t benefit you, and may cause you some problems.

 

• Unlike credit cards, debit cards won’t help you build your credit history. Checking account debit card transactions aren’t reported to the credit bureaus. So even if you use your debit card responsibly, it won’t help you get the best loan rates.  
• If there is a dispute about a retail transaction, you don’t come from a position of strength if you used your debit card for the purchase. It can be difficult to dispute a charge on a debit card, if not impossible. Credit cards often reimburse cardholders fully for transactions where the seller misrepresented the item for sale. This is especially helpful for online purchases.  
• If you lose your debit card or if it’s stolen, you’re responsible for some or all of the resulting bad debt on the card. Credit cards generally only hold cardholders responsible for $50 worth of fraudulent charges, or none of the charges. Stolen or lost debit cards with fraudulent charges are the responsibility of the cardholders, to the tune of $500.

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