When my husband and I first started dating, we were both frugal by necessity: Our graduate student budgets and accumulating student loans didn’t leave much room for splurging. While we agreed, for the most part, on how much to spend, we differed greatly on how to make those purchases.
For me, using a credit card for almost everything seemed like a no-brainer: Not only could I earn cash back, but I also didn’t have to worry about anyone stealing money out of my bank account if my card was lost or stolen. I was also careful to pay off my balance every month to avoid interest and fees. My husband, on the other hand, didn’t want the hassle of having to pay another monthly bill, so he used a debit card for almost all of his purchases, which deducted automatically from his bank account.
While we were dating, the credit versus debit difference didn’t really matter: Money-wise, we could each do our own thing. But as soon as we got married, I knew I had to convince him that my approach was the better choice. After all, if his debit card got stolen, the thief could potentially drain our joint bank account, so my money was at stake, too.
Here’s how I persuaded him to make the switch.
Unlike debit cards, credit cards often earn rewards, in the form of cash back, points or miles. At the time, I was using a basic 1% cash-back card. Once we both put the bulk of our spending on that account, we started earning $100 worth of credits every now and then.
Sometimes, we put the money toward a fancy restaurant meal. Occasionally, we shopped on our card issuer’s online portal — we still use the expensive stainless steel toaster that was beyond our normal budget but affordable with our rewards credits.
These days, we’ve optimized our credit card choices so we earn better rewards, including a higher rate for groceries and Amazon household purchases, two of our biggest expenses. We also keep things simple and transfer our accumulated cash-back rewards into our account as a credit, to help reduce our monthly expenses.
Better fraud protection
If someone steals your debit card number, your bank account can be emptied in a matter of minutes. If you quickly report the fraud, there’s a good chance your bank will help you recover the missing funds — but in the meantime, you’re missing your money and could default on bills.
If someone steals your credit card number, on the other hand, under federal law the most you could be out is $50. Additionally, many credit cards offer full protection from fraud, meaning you aren’t responsible for any of the fraudulent charges. (After a theft, you’ll need to update payment details for bills that are automatically paid with your credit card.)
We’ve been grateful for the fraud protection that comes with credit cards on many occasions when our card numbers have been stolen over the years.
Every time it happens, I’m so glad it wasn’t my bank account that was compromised.
As we combined our finances, it got harder to track the money going in and out than it had been when I just had to worry about myself. When I reviewed our monthly joint bank account statement, I didn’t always know what all of the deductions were for since there were so many — my husband was using his debit card for everything from buying gas to paying for lunch.
After he switched over to using a credit card instead, budgeting became easier. My husband could easily review his own daily charges each month, and I didn’t have to worry about tracking all of the deductions from our joint account. We each had our own credit card with predictable monthly due dates. That meant we could make one-time credit card bill payments after our paychecks arrived, instead of making multiple individual bill payments throughout the month with a debit card. Of course, we also had to be careful not to go over our budget, since credit cards let you spend up to their credit limit.
To ease my husband’s concern that he would forget to pay and face a late fee, we set up automatic bill pay.
My husband now agrees that trading his debit card for a credit card made financial sense. Twelve years and two kids later, he’s still using his credit card for all of his daily purchases, and the rewards that we earn help pad our family’s budget.