“Debit or credit?” You hear it just about every time you check out. But which is best for you and your wallet? There is certainly a difference between paying with credit vs. debit, so here are five scenarios when choosing credit might be your best payment option.

If you’re shopping online

When shopping online, paying with credit instead of debit might be your best option. Using a credit card typically provides an extra layer to help protect against fraud and it could make getting a refund easier. When you pay with your credit card, you may have the ability to withhold payment or dispute a charge if there is an issue with your purchase. When you pay with your debit card, the funds are immediately withdrawn from your account, leaving you without the cash until you can settle the dispute with the merchant and your bank on your own.

If you’re making a large purchase

When you’re buying a big ticket item like a new TV, computer or major appliance, credit cards may provide several benefits that extend beyond their grace periods. Some credit cards feature cardmember protection benefits like extended product warranties, which may extend the manufacturer’s warranty. Another cardmember benefit may include purchase protection that provides coverage for recently purchased items if they are damaged or stolen within a specific time period after purchase. Some credit card companies also offer extra perks like return guarantee and price protection. 

When you’re booking travel or on vacation

When reserving a hotel room or a rental car, it’s often a good idea to use a credit card. Why? Because car rental companies and hotels sometimes only accept credit card reservations. If they do accept a debit card, a hotel or car rental company will sometimes place a hold on cash in your account as a form of a security deposit to ensure you have sufficient funds to cover the costs. This hold can tie up cash in your checking account.

Choosing to pay with credit vs. debit when traveling is a great way to better protect yourself from fraud in case your card becomes lost or stolen. If your debit card gets stolen, the thief may gain access to your checking account. While debit cards offer anti-fraud benefits, you may be immediately without the cash amount until you can provide evidence of theft. Also, travel credit cards can qualify you for extra perks like complimentary travel insurance, exclusive discounts and even cash back on hotel accommodations, airline tickets and car rentals.

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If you want to maximize your rewards

If you have a rewards card, charging many of your everyday purchases can quickly add up to some hefty rewards. Some credit cards offer rewards in categories such as gas stations, restaurants, retailers and more, and some feature double points or other reward promotions.

Credit cards aren’t just convenient — they offer purchasing power and even cash rewards. However, it’s important to remember the benefits of paying with credit can become lost in unnecessary fees and interest if you do not use your card responsibly.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.