Debit Cards and Travel. How debit cards are making a comeback.

It seems like there is always a new credit card on the market that is offering a ridiculous sign-up bonus. Every month, The Points Guy shares recommendations for the best credit cards and the appeal to get a new card is great. Although credit card sign-up bonuses are a great way to earn free flights and hotel stays, I’ve noticed that the more credit cards I have, the harder it is to manage.

One of the biggest challenges I’ve faced when managing so many credit cards (and an authorized user) is keeping track of all the category bonuses. Since each card earns a maximum amount of points per category, when trying to play the points game and align expenses to the right credit card, I use one card for gas, another for travel, another for dining and so on. So at the end of the month, I have balances on different credit cards. Can you see how things can get complicated?

It’s becoming nearly impossible to manage all of my credit cards and it has me wondering, how many credit cards is too many?

While I work on closing down a few lackluster credit cards to stay organized, I’ve decided to go back to the basics and use my debit card – it’s been years! Until recently, I only used them at the bank and ATM. However, after feeling flustered, I can see why Terri over at Terrific Words wants to become a points traveler without the credit cards. Nevertheless, for those who see the value in having credit cards, I recommend adding debit cards to the mix to better manage your finances.

Debit cards keep you accountable. When you use a debit card you are consciously deciding to pay through a checking account. The funds are withdrawn immediately and as a result, you can better track spending activity in real-time. With a credit card, it will take at least a day for the charges to post and another day for the payment to process making it difficult to track.

Also, you can easily lose track of multiple credit card balances if you aren’t keeping a close eye on all of your expenses. This can lead to hefty interest charges and late penalties. With debit cards, you’ll avoid all of these. All you have to worry about is having enough money in your checking account to make purchases.

I believe that a healthy financial plan can include both credit and debit cards. I found that using debit cards to make smaller everyday purchases has been very helpful in managing my finances. This way, at any given time, I can look at my checking account balance and know where I stand. I now use my credit card to make bigger purchases (as long as I can afford it). I still earn a substantial amount of miles and travel points every month and my spending is under control.

Try setting a minimum spending limit on all credit card purchases. Anything below that limit goes on your debit card.

I also loved Half the Clothes’ suggestion to compare your credit card and bank balance every day. Making sure your checking account can cover all credit card expenses is a great rule of thumb to follow.

Overall if you are struggling with managing too many credit cards, consider closing some of less lucrative ones. You can also try using debit cards to better track your expenses in real-time. Remember, the goal is to have good credit and a healthy and sustainable process in place to manage your finances. Taking advantage of the points game is secondary.

 

Do YOU use debit cards? Why or why not?

Pre-Trip Financial Checklist

Get financially organized before you leave for your next vacation with this free checklist. Use this alongside your packing list!

Unsubscribe at any time. Powered by ConvertKit
37 replies
  1. Cassie @ Cass Travels says:

    Debit cards are super widely used in London – I’ve met plenty of people over here who don’t use credit cards at all! I’m always telling people about the points and rewards (assuming you use them well and in a good manner!))

    Reply
  2. Cynthia says:

    My dad is suggesting I bring a few prepaid Visa cards when I go to Europe for three months. Have you had any experience with this? There are so many options!

    Reply
    • Danielle Desir says:

      No unfortunately I haven’t. But I know how fickle credit card/debit cards can be in Europe . I think if you bring 2 credit cards, 1 debit and cash, you should be secure. Diversify!

      Reply
  3. Travelerette says:

    I love debit cards! I actually only have one credit card and one debit card. I mostly just use the debit card because that way I never spend more money than I have. So many Americans are in debt and I don’t want to be one of them!

    Reply
  4. Paige Brown says:

    I have two credit cards, but I really only use one of them because of the amazing travel rewards, but I’m definitely more of a cash-user because physically watching it leave my wallet definitely keeps me more accountable than swiping the debit card. I’m with you, I think that when I hear people juggling a million cards I feel the panic setting in. Haha.

    Reply
  5. Liz Jo says:

    This is why we have one credit card and one debit card. Credit cards for large purchases and debit cards for smaller items or just plain cash. It helps a lot I had an ex who racked up all sorts of debt from credit cards.

    Reply
  6. Danielle Desir says:

    I love the idea of a thank you gift – that is so sweet and such a nice thing to do and keeps the relationship open. I really love that! For undergrad and grad school I had to take out loans from Uncle Sam, it’s been a tough and exhausting journey. But the end is in sight, about 9 more months. I’m very excited. Owning a home is also in my future, so the cycle continues =)

    Reply
  7. Danielle Desir says:

    I have the Chase Sapphire card as well. I really like it but I also have the Chase Freedom where I have to keep track of all of the bonus categories for the quarter — my head hurts thinking about it.

    Reply
  8. Christina says:

    I have recently started looking into the whole travel hacking thing and it has amazed me how many credit cards people can keep track of in their head. I still use my debit card a lot. I agree that there needs to be a balance between debit and credit. Hope we got rewards for using debit more 🙂

    Reply
  9. Diana says:

    I just use two cards – Capital One Venture and an American Airlines card. The AA card I only keep around for their mileage promotions, but I primarily use my Capital One Venture because you get 2 points per $1 spent on all purchases (same as Barclay’s but Barclay’s has a higher annual fee). This keeps it pretty simple, and I never have to remember to pay off balances on multiple credit cards!

    Reply
  10. Samantha Applewhaite says:

    I use my debit card (both in Canada and in Korea) allll the time. I try not to use my credit card because of the high interest rates. When I go travelling, I try to take out the money beforehand and exchange in the country I’m visiting. I just got a new debit card with my bank back home and it’s a virtual visa debit card. So I can purchase things online – just like I would with a credit card, but minus the fees!

    Reply
  11. Anisa Alhilali says:

    I only use one credit card so that it is not so difficult to manage. I know I may not be maximizing my point accumulation but to me the risk of late payments,etc is not worth it. I don’t use my debit card much – wouldn’t it be nice if someone came out with a debit card that earned you points!

    Reply
    • Danielle Desir says:

      Your right Anisa — point accumulation at what expenses? Late payments, more debt and interest fees. Personally, I don’t think it’s advantageous and it’s so easy to fall down that slippery slope if you aren’t careful.

      Reply
  12. PrincessInACaravan says:

    Since moving overseas I have pretty much stopped using my credit cards (other than to book flights). It’s such a nice feeling not to have debt but….it does mean no points (I was never very good at keeping on top of them anyway!)

    Reply
  13. Fee says:

    I’ve still majory used credit cards which was always seen as a bad thing when going abroad as it protects you / insurance etc. I’m more of a travel money card for ease of use and then taking out a set amount of currency. Perhaps for long-term travel i would look into other options.

    Reply
  14. Megan Indoe says:

    It’s refreshing to read this because we have been going back and forth on which credit cards we should be getting. We have the Chase Sapphire card so far and like it. But we are thinking of adding one more for bonuses. You’re absolutely right about it being tricky to manage different cards, categories, and perks! I will be sharing this with my fiance to help him reconsider wanting another card!

    Reply
  15. TheSoulofSeoul says:

    My mother always said debit cards were better than credit because it’s possible to hold yourself accountable real quick when the money is coming straight out. Credit cards can rack up interest and it can be difficult to remember how much you owe with all of that or when, etc. Those credit cards are fickle things.

    Reply
  16. Hung Thai says:

    Great post. I definitely DON’T ever use my debit card… mainly because my phone serves as both a phone and a wallet. It only has room for 4 cards and there just isn’t enough room for a debit card. I do love carrying cash though as a backup.

    Reply
  17. Jess says:

    Yes, you definitely need to be careful to not accidentally overspend when using credit cards. Especially when using multiple cards in the same month.

    Reply
  18. dramrita says:

    Absolutely .Giving people cash puts me off shopping.That’s how my hubby makes me shop less.He makes me pay myself ?I think I make a lot of savings by not giving my money to credit card companies. We have a home loan.Otherwise we are debt free?

    Reply
    • dramrita says:

      Me and my hubby had to take loans while doing our postgrad medical training.Luckily it was money lent by family so no interest was needed.We paid it off within 2 years of passing from Medical school.Then after saving for the downpayment for a house we booked a flat.Here we , got a joint bank loan plus money was lent by my mom.Whenever we have borrowed money from any family friend we have tried to pay before time with a little thank you gift.So that if there’s a next time I won’t have a problem. ?

      Reply
  19. Prianka says:

    I prefer using credit cards from a convenience perspective, as well as rewards – but I also only have 2 cards. If you have percentage back cards, no matter how low that percentage, to me it is a waste to _not_ take advantage of that! People just need to know themselves when deciding which is best. It’s worth noting that you can set up automatic payments, or have the bank drop you an email to remind you to pay those monthly bills!

    Reply
  20. dramrita says:

    We as a family had decided 8 years back to use only debit card for our online transactions.Cash for regular everyday stuff.Everytime you take out cash from your purse you want to spend a little less.
    Actually my farher used to rake up huge credit cards debts.Having credit card oeople banging on your doors can put you off using the cards forever.?

    Reply
  21. Lindsey Nicole says:

    I completely agree with your point about Debit cards are a better way to budget your expenses. I hate getting my credit card bill and I can’t believe how much I spent. Having a debit card I feel more in control of my finances. Great post!

    Reply
  22. Sumti Bhadani says:

    fully agree with your post and points you make esp. “compare your bank balance and credit card expense each” Day. It is very important. Thanks for sharing the useful information !!

    Reply
  23. Nicole says:

    Reading this post, I’m thinking that’s exactly how I did things twelve years ago- daily purchases with debit cards and a credit card for unusual purchases. Now I’m wondering why I ever stopped. Thanks for sharing.

    Reply
  24. Penny @ pennyspassion.blogspot says:

    I’ve been a big fan of my debit card until our air conditioner broke and the repair company withdrew $1980 instead of $198. Over a holiday weekend. Now I’m leaning more towards using a credit card and paying it off every month.

    Reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *