Credit Cards vs. Debit Cards

Smart Money has an article about how Credit Cards Offer Better Protection Than Debit Cards.

This is a conversation I've had several times and it's just one of the reasons that credit cards are better than debit cards in my opinion. Aside from the fraud protection, credit cards offer other benefits like:

1. Rewards on purchases. I make about $400/year on rewards from purchases. This is free money and anyone who has taken one of my classes knows I'm all about free money.
2. Interest earned on delayed payment. Debit cards take that money out of your account immediately which means you get no benefit from it. By using a credit card, you get a few weeks to hold on to that money and earn some more interest from it. With high yield savings accounts like HSBC, Emigrant and others offering rates over 5% and ING's new 4% checking interest rate, this is a chance to make a little extra cash.

So basically, I'm a big fan of credit cards. As long as you can pay off your balance in full each month, I don't see any reason to use a debit card over a credit card.