10 Debit Card Dangers

Rewards: While some debit cards are beginning to offer rewards, they are still far fewer and less valuable than those rewards that credit cards offer.

Money taken instantly: 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.

No added services: 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.

Tracking spending: 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.

Banks may trick you into fees: 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.

Credit history: 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.