4 Reasons to Ditch Your Old Debit Card - NerdWallet (2024)

FAQs

4 Reasons to Ditch Your Old Debit Card - NerdWallet? ›

Debit cards don't build credit, while credit cards are one of the best tools for building or rebuilding a credit score. Debit cards may earn some rewards, but they're typically not as lucrative as what's offered by cash back and rewards credit cards.

Debit cards don't build credit, while credit cards are one of the best tools for building or rebuilding a credit score. Debit cards may earn some rewards, but they're typically not as lucrative as what's offered by cash back and rewards credit cards.

Cutting up your card needs to be done in a methodical manner to ensure you have voided each function from working and to make sure the physical features cannot be read by a possible fraudster. Tip: any magnet will work – including a fridge magnet.

To render your expired or damaged debit card unusable, start by cutting it into several pieces. Use a pair of scissors or a sharp object to carefully cut through the magnetic strip, chip, and embossed numbers on the card. Make sure to cut through the card in multiple places to destroy its integrity.

You Won't Improve Your Credit Score

Since debit cards aren't based on credit, they won't help you build it with each use. With a debit card, you aren't borrowing credit for purchasing. Each time you use it, you are withdrawing directly from your checking account.

No Rewards

Unless you have a rewards checking account, you won't earn any points, miles, or cash back on purchases made with your debit card. Because rewards can save you money, depending on how you redeem them, you could be missing out if you only spend with a debit card.

If you use your old card after the expiration date, the transaction will likely be declined. You usually have until the last calendar day of the expiration month before your service will be completely deactivated. At that point, your account will still be active, but your card won't.

Taking yours out will help prevent thieves from gaining access to your credit. Then do the same with the bottom half. Cut the 3-digit security code on the reverse and cut that into pieces so it cannot be read or pieced back together.

“We recommend that consumers cut through the EMV chip, then further cut the card a few times along the short side, and dispose of the sections in more than one trash bag,” says Sarah Grano, a spokeswoman for the American Bankers Association. Or feed plastic cards into a paper shredder designed to handle them.

Why do poor people use debit cards? ›

First, debit cards lower the indirect transaction costs of accessing money in an account by facilitating more convenient access via a network of ATMs. Second, debit cards reduce the indirect cost of checking balances, which enables individuals to verify that banks are not unexpectedly reducing balances.

A debit card doesn't offer the same fraud protection

If a stranger were to find your debit card, they could essentially use all the money in your linked checking account. While you can get your money bank when you report debit card fraud, it may take time or you may not be reimbursed at all.

While they won't be able to use the card to make transactions, someone could use the personal information listed on the card or the data stored in the card's magnetic strip to commit identity fraud. Instead of throwing your card away, you should destroy it first so that no one can use the information from your card.

Your current card will continue to work until the expiration date passes. However, to avoid misplacing your new card or having unauthorized use of the old card, we advise you to destroy your old card and begin using the new card immediately.

When a fraudulent transaction occurs on your credit card, you have lost no money. You can report the fraud, get a credit on your statement, and the issue will never affect your bank account. With a debit card, your bank account balance is affected from the moment the fraudulent transaction takes place.

One of the most common questions people have is whether closing their bank account will hurt their credit score. The good news is that closing a bank account that's in good standing won't directly impact your credit.

Credit cards are safer to carry than cash and offer stronger fraud protections than debit. You can earn significant rewards without changing your spending habits. It's easier to track your spending. Responsible credit card use is one of the easiest and fastest ways to build credit.

You don't pay extra money in interest when you pay with a debit card. You can use a debit card at an ATM to get money from your checking account. You do not build a credit history using a debit card.