Nearly half of Americans prefer debit over credit cards, but that's not necessarily good

Americans and credit cards go together like apple pie and ice cream.

The 'buy now, pay later' mentality has us forgetting we do eventually have to pay later. Perhaps that's why the average household has over $8,000 dollars in credit card debt, according to Wallethub.

But maybe all this debt is making us change to 'buy now, pay now.'

A new study by NerdWallet says 44 percent of Americans say they mostly use debit cards to buy things such as food and gas. That’s compared to 34 percent who primarily use credit cards.

Temptation is a real struggle, and Amazon is one click away from charging the plastic.

While debit cards help control spending, credit cards still have value. For one, it builds credit. Each time you pay off your bill on time your credit card score takes a positive hit. So don’t be one of the 24 percent of Americans who apparently think debit cards will boost your credit score.

Debit cards also don’t come with rewards. Cash back when you use a credit card can add up and extra miles for a new card sign up. 

Still, credit cards aren’t for everyone, especially those without the funds to back up their purchases.

Twenty-five percent of those in the study said credit cards give them anxiety. Who wants more anxiety in their life? Still, it’s good to weigh the pros and cons of both. 

RELATED: 10 debit card dangers

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Debit Cards vs. Credit Cards

The key difference between credit cards and debit cards is that each time a consumer uses a credit card, he or she is incurring debt to a credit card issuer.
Debit cards, on the other hand, are a financial instrument whereby the consumer is using his or her own money that is being withdrawn from an existing banking account that has already been funded. This major difference means there are 10 disadvantages of debit card use.

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Debit cards don't offer as much protection against fraudulent use as credit cards do. While debit cards are offering more protection than they did in the past, the exact protection can vary from one card to another. This is especially true if a debit card has been taken and is not been reported as stolen in a timely manner. It's important to contact your bank to find out exactly what protection you have and what you are liable for in the event of fraud occurring.
If there is a dispute regarding a purchase you make, you are in a weaker position when you use a debit card vs. a credit card. This is because the merchant already has your money when a debit card is used; this is not the case with a credit card. That means that while the dispute is taking place, your money will remain with the merchant and will only be returned if the dispute is mutually settled in your favor at the end.
Using money out of your personal account when making a purchase with a debit card can have a huge effect when fraud or disputes occur. While the fraud or dispute may eventually be ruled in your favor, the time it takes to resolve the problem means you will not have that money in your account. This can cause other transactions to default, forcing you to pay substantial fees. If a default occurs, this can trigger universal default from the credit rating services, and the problem can continue to cascade from there.
While some debit cards are beginning to offer rewards, they are still far fewer and less valuable than those rewards that credit cards offer.
When you use a debit card, the money is immediately taken out of your banking account. With a credit card, there is a float period between the time you make the purchase and the date the credit card bill is due. This means that you earn a little bit of extra interest on your money when you use a credit card vs. a debit card.
Credit cards often come with added benefits, such as extended warranties on products purchased and insurance for rental cars and airline travel. Debit cards do not offer these services, and that means you will have to pay extra for them if you want them.
When using a debit card, it can be difficult to keep track of what you purchased if you aren't diligent in writing down everything. Making a mistake on the balance can cause you to think you have more in the account than you really do, and that can ultimately result in accidental overdrafts.
Unfortunately, banks aren't always helpful when it comes to figuring out how much you have in your account. Some banks report your balance from the ATM when you use your debit card as what you have in the bank, plus courtesy overdraft, leading you to believe you have more in your account than you really do. This can cause you to spend more than is in the account and rack up overdraft fees.
Transactions and payments made through your debit card are not reported to the credit agencies like they are with credit cards, meaning that your good habits don't help you build your credit score. With credit scores now carrying greater importance in many personal finance areas, building this good credit is becoming more and more important.
Using a debit card as a deposit on a rental car or a hotel room is not always possible. In the cases where it is possible, often the vendor will freeze a portion of the money in the account, and this can cause problems for other payments. Even when this money is returned, it can take up to a week to return to your account. This means that even when you believe you have money, it may not be available for use, and this can cause you to exceed your limits and incur fees.
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