Choosing a debit card is an excellent way to avoid the debt of using a credit card. However, there are several reasons why choosing credit over debit is more convenient.

If you spend within your means and pay the balance in full each month, you don’t have to pay interest and debt on your credit card. These actions allow you to use the credit card without problems. You can also take advantage of the various benefits that the card offers.

So now let’s see those important reasons to lean more towards the credit card before the debit card.

1. To get rewards

Many credit cards offer travel rewards or cash back for every dollar you spend. In addition, some offer more rewards for certain purchases, such as restaurants, gas stations, and drug stores, allowing you to accumulate more with your usual expenses.

While some cards charge annual fees, rewards and benefits can often exceed the yearly charge. If you pay your balance in full each month and don’t earn interest, you’ll earn cash or points just for routine spending.

Use your credit card for everything and get more benefits.

(See also: Best Travel Rewards Credit Cards).

2. To improve your credit profile

All Canadians have a credit profile saved by the country’s credit bureaus. This profile contains information about each loan requested, held, or paid and is considered when granting new loans.

Your credit profile is positively affected by transactions that show responsible use of credit. And these include timely payment history and access to credit over a long period etc.

(See also: 5 Ways To Build And Increase Your Credit Score)

On the other hand, the profile is negatively affected by not making payments, making them out of date, or not having a good credit history. (See also: 5 Ways To Avoid Bad Credit).

When you use and pay off a credit card every month, it improves your credit profile. So when you want to apply for a loan in the future, you’re more likely to be approved at a lower interest rate if you have a positive credit history. On the other hand, using a debit card does not have any effect on your credit history.

3. Greater protection of your purchases and on trips

Many credit cards offer certain protections for purchases and travel. These benefits may include travel delay insurance, flight cancellation insurance, and travel accident insurance.

(See also: Best Travel Insurance Credit Cards In Canada).

Some other credit cards offer purchase and extended warranty protection. For example, if something you buy is damaged, lost, or stolen within a certain time after you purchased it, you may have claim coverage as long as you purchased the item with the credit card. In addition, the extended warranty protection offers an additional year of coverage on select purchases with a manufacturer’s warranty of three years or less.

What’s more? Some credit cards don’t charge foreign exchange fees when you travel abroad. This is a significant saving of 2.5% for frequent travelers. (See also: Canada’s 3 Best No Foreign Transaction Fee Credit Cards).

Debit cards generally don’t offer similar protections, making it wiser to use a credit card for larger purchases and travel.

4. Use your credit card to protect your bank account

Credit cards offer more robust protection against fraud and a degree of separation from your bank account, which serves as an added security measure.

Debit cards are directly connected to your account. So whenever you make a purchase, whether it is processed as a credit or a debit, the funds are immediately withdrawn from your account and transferred to the merchant. It’s like an electronic check.

If a thief gets hold of your card and makes a withdrawal, you will lose any cash the person spends. While most banks and card processors offer at least basic fraud protection, you may not get your money back right away, especially if it takes a lengthy investigation.

However, with a credit card, the money in your bank account is not posted until you pay your statement. If someone steals your number and makes fraudulent charges, you can mark them as fraud so you won’t have to pay them (the card will be frozen) while the situation is investigated. You don’t have to worry about losing money.

In conclusion

If you decide to use your credit card to get the most benefits, you have to use it as if it were a debit card. This means not spending more money than you have and not leaving a balance month after month, paying the minimum amount, or only a part of your balance. Instead, you have to pay the balance in full each month to avoid extra charges and accumulating debt.