Even With a 720+ Score, Using Debit Means You’re Leaving Benefits on the Table

Building a strong credit score is important for many reasons, as it opens the door to affordable borrowing and helps you out if a landlord or potential employer checks your credit. You’ll even benefit from paying lower deposits on utilities and won’t have to worry about whether you qualify for a cell phone when you try to sign up for a plan. 

Another big benefit of having good credit is that you can qualify for some pretty impressive benefits if you use the right kind of payment method. Unfortunately, a debit card isn’t it.

One Reddit user recently realized that. The Redditor posted because he discovered that despite his credit score, which is well above 720, he’s missing out on some very important perks by using a debit card to pay for all of his purchases. 

Good credit opens up the door to great rewards cards

The Redditor commented that he has a 740 credit score, but he has been making all of his purchases with his debit card — and he now knows that he’s leaving money on the table. He’s made the smart choice to change that, but isn’t sure where to start. 

The good news was, other Redditors had some great suggestions for how he could stop missing out on perks and start reaping the benefits of his great credit. Specifically, because the poster’s score is so high, he should be able to qualify for just about any credit card that he wants. And, a cash back card is most likely going to be his best bet.

Several posters who responded to his thread pointed out that there are two ways he could go. He could get an all-around great cash back card, such as one offering 2% back on every purchase. Or, he could opt for a cash back card that offers a lower standard 1% rate and that then offers bonus cash back on certain kinds of things that he buys, like groceries and gas.

If the poster really wants to maximize the perks and rewards he earns, he actually could opt to get both — especially since his credit is good enough to qualify. He could opt for a standard 2% back card to use on pretty much all of his purchases and then sign up for a bonus card to use just on the bonus categories. 

Whether the poster wants to go to all that trouble or not, even getting 1% or 2% cash back is going to be a lot better than using a debit card for everything. And, if he can set up a system so he gets between 2% back and 5% back on all purchases by getting one or two cards, he could end up with hundreds or even thousands of dollars per year in extra cash coming back to him. 

Credit cards also offer other perks 

When the poster said he felt like he was missing out, he was referring primarily to rewards and said he wanted the most bang for his buck in finding a program that gave him cash back or points for purchases. Cards also have other benefits as well, though, including strong fraud protections, as well as certain other cardmember perks.

Those benefits vary by card, but can include things like extended warranties, protection if merchants don’t deliver as promised or aren’t fair with their return policy, trip interruption insurance, car rental insurance coverage, and more. 

Cards can even help you build credit, but responsible use is key

Finally, credit cards can help you to boost your credit, so the OP who already has a pretty good score could take it from good to great.  As long as you don’t charge more than 30% of your available card balance and you pay your bills on time, your cards can make a huge difference in helping you earn a good credit score over the long run.

Of course, you don’t ever want to carry a balance on your cards or get in over your head, or you could hurt your credit and diminish the value of all the other benefits you are getting. Since the OP has been responsible with debt, though, there’s little reason to believe he’ll get into trouble with his cards, and thus no reason not to get one.

The OP is definitely losing out right now, and he should take steps to change that. Shopping around to find the best cash back card as soon as possible will help ensure he doesn’t keep missing out, so he should get started researching his options and apply for a card today. 

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