SouthEast Bank

Created Under:

Jack & Bean


Can You Build Credit with A Debit Card?


Debit cards cannot help you build credit. Debit and credit cards may seem interchangeable, and to some extent, they can be in their purchasing use, but only one of them helps you build credit: your credit card. 

Even if you use your debit card responsibly, the purchases made with it do not go towards building your credit score. Credit cards, on the other hand, will affect your credit; just make sure you pay them off in time in order to maintain a healthy score (and avoid costly interest!). If you are looking to build credit, here are a few reasons to put down your debit card and pull out your credit card for certain purchases.

Why You Can’t Build Credit with Traditional Debit Cards

Debit cards take money directly from your checking account when you use it to purchase goods or services, and they can also be used to take out cash from ATMs. Using a debit card means you are limited to what you have in your checking account. If you overspend, you will typically be charged an overdraft fee.

Traditional credit cards, like a store credit card or airline miles card, let you buy things on borrowed money, i.e., credit. Depending on the card, there are conditions when you use it, and there will be a limit on how much can be spent based on the credit line you receive. You must pay the money you spent on it back, plus any interest if you’ve accrued a balance. 


Read Full Article