A finance expert has urged shoppers to stop using debit cards, explaining why it is beneficial to put “everything” on to your credit card instead.
Steve Saxton, who works as a mortgage lender, took to TikTok to explain that even if your debit card states ‘Visa’ at the bottom, it’s still “directly tied” to your current account for every transaction you make. “So what does this mean?” he continued. “If there’s anything that ever happens – any kind of fraud or someone gets hold of your information – your current account is at risk.”
On the flip side, however, using a credit card can prevent such problems from escalating. “To be clear – if you use a credit card, that is not your money,” Steve explained. “I’m saying that in a positive light – because it’s not your money, it’s not tied directly to your bank account, it’s the credit card company’s money.”
As it’s the company paying the vendor or the merchant, it’s not your money leaving the account, Steve adds. Acknowledging that you may still be able to retrieve money taken fraudulently from your debit card, he noted it may take considerable time. “I’ve heard people taking weeks to get the money back because the banks or the credit union doesn’t believe the charge,” he revealed.
However, on a credit card, the money is never taken from your current account and you can dispute payments with the likes of Visa, Mastercard and Amex. “They will remove it from your statement,” Steve continued. “It’s never going to come from your account, so trust me – I’ve been in lending for 25 years – put everything on your credit card.”
He was quick to warn, however: “Pay it off immediately, or every Friday, or the next day or night – I don’t care. However, if you can’t afford to pay for something in cash or pulled from your debit account, don’t buy it – don’t put it on a credit card.”
Steve closed by listing several other common perks to credit card use including bonuses, air miles, cash back and fraud protection. “All of these things come with using a credit card, but here’s the big thing – it’s not tied to your current account and that’s the beauty of it.”
Hailing the advice, one TikTok user penned in response: “He’s absolutely right. I pay it off immediately. I rack up points, miles and rewards off of someone else’s money. Using your debit card is scary these days. So many scam artists.”
A second agreed: “You don’t pay interest if you pay it right away, but you do get all the benefits from the credit cards such as cashback or points or whatever that particular credit card offers. It is a way better way.” Whilst a third said: “He’s absolutely right the rich do it that way if somebody steals your card number and racks it up, the bank will be more than happy to fix that than your debit card.”
Just as Steve did, however, others issued financial caution including one person who shared: “Not for everyone. You can easily over spend and your credit card debt gets ahead of you. Then you’ll be in debt.”
A second revealed their scenario: “Credit cards are no good for me. You just say, ‘Oh I’ll pay it next week or next month’ and it keeps on getting bigger and bigger. That’s what happened to me. I’ll never have a credit card again.”
And a third noted another potential problem in the long run: “When you use a credit card, you still have to pay for what you bought. If you don’t, then you start accumulating debt which ruins your credit score, which can ruin opportunities for a lot of things.”
Indeed, Money Helper points out the dangers that come with credit card use, advising that you’ll usually pay expensive interest on everything if you pay back less than the full amount, whilst withdrawing cash is costly, usually with expensive interest and a fee each time.
It adds: “You must pay the minimum monthly repayment to avoid fees, penalties and damage to your credit rating. Only paying the minimum can mean it takes years to clear your debt. You can’t spend more than your agreed credit limit.
“If you struggle to manage your money or think you might overspend, try and avoid getting a credit card. It could quickly lead to a spiral of uncontrollable costs.”
Meanwhile, Citizen’s Advice offers extensive advice on credit cards here.
