Using a debit card is fast, efficient and convenient, but can it influence that magic little number which hangs over our heads as consumers? You know the number…the powerful and influential credit score.

Most of us strive to build and protect our credit, which is why it’s essential to monitor everything that could potentially impact our scores. So, when you consider all the plastic in your wallet, you may wonder…does my debit card affect my credit score and can I use it to build credit?

Debit cards and credit cards may look similar, but credit bureaus regard them differently. Generally speaking, debit card activity doesn’t show up on a credit check or impact your FICO score. However, using a debit card can indirectly affect your credit score in two ways.

First, if you choose to use a debit card only and avoid credit cards entirely, you’re missing the opportunity to create a solid history of credit card use. You could potentially be unable to get a score if you don’t have any credit history at all. Second, if you have credit cards but don’t ever use them they could get cancelled because of inactivity. Since a large part of your score is based on how reliably you use credit, showing no use on open accounts could actually drop your score.

Alternatively, by using a debit card instead of a credit card, you can avoid overspending and facing the potential negative impact on your credit report from late payments and outstanding balances. Not to mention high credit card interest rates.

For most of us, using a combination of both debit and credit allows flexibility in managing our finances. And understanding the difference between the two is a good place to start when working to establish or maintain good credit.

Here’s a quick review…

Debit Card Pros:
– A convenient way to pay with the money you have without carrying cash or check
– You’re less likely to overspend
– No interest on purchases

Debit Card Cons:
– Does not build credit
– Limited fraud protection

Credit Card Pros:
– Financial flexibility beyond the cash you have on hand
– Fraud protection
– Can help build or establish credit

Credit Card Cons:
– Risk slipping into credit card debt by overspending
– High interest charges on purchases