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Debit or credit: Which card offers better benefits for everyday purchases?

In some situations, using a credit card might be a better choice.
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Choosing between debit and credit cards is a decision many of us face multiple times daily.

The choice comes down to whether you want money withdrawn from your bank account immediately, so you don't have to worry about it again, or added to a monthly credit card bill.

For Lee Gorman, credit cards are the clear winner for two key reasons.

"We normally use credit cards because it helps us track all our spending, and we take advantage of the miles we get back from our credit card company," Gorman said.

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Other shoppers, like Charmain McKinney, prefer the simplicity of debit cards.

"Because I know it's coming right out of there, and there is no interest rate on my money, when I spend it and don't have to worry about paying it back," McKinney said.

Watch to see the advantages and disadvantages of debit and credit cards:

Debit vs Credit: When it's best to use each card

So which card is better for you?

Chip Lupo with WalletHub says the right choice depends on your personal spending habits.

"It's very easy to go on spending sprees with a debit card and then wreck your budget," Lupo said.

He recommends using credit cards for everyday purchases because they offer more benefits, including rewards like cash back, air travel miles and hotel points. Credit cards also provide better fraud protection and help build your credit score.

However, Lupo cautions that these benefits only apply if you use credit cards responsibly.

"If you are racking up hundreds and hundreds and hundreds of dollars in purchases every month and carrying a balance, interest charges are going to apply. Not only is that basically going to cancel out any rewards you've earned, that's gonna be tacked onto the balance every day," Lupo said.

For cash withdrawals, Lupo recommends using your debit card rather than taking credit card cash advances, which typically come with high fees and interest rates.

And finally, if you worry about fraudulent purchases, credit cards always allow you to dispute the charge before you pay. With debit cards, you have to dispute the fraud after the money comes out of your bank account, and then hope you can get it returned.

Whether you prefer to put your daily coffee on debit or credit, understanding the advantages and disadvantages of each option can help you make smarter financial decisions.

That way you don't waste your money.

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