Blog - Debit vs Credit - When You Should Stop Worrying About Earning Points

Debit vs Credit: When You Should Stop Worrying About Earning Points

I’m going to get right to the point with this – If you are struggling with credit card debt, you need to immediately STOP using credit cards, and go back to using debit or cash only.

And I can hear a lot of you right now saying “But Jared, what about all of the points I could be earning by using my credit card? Cash back rewards, frequent flier miles, bonus miles – why wouldn’t I want to get those benefits?!”

It’s simple – those rewards aren’t outweighing the negative affect debt is having on your life.


What prompted me to write this post is a conversation I had the other day with someone who is trying to get their finances in order. They are a spend-thrift, and admittedly don’t do well with saving.

[How To Save More Money]

This person has repeatedly tried to get their spending in line, but they always seem to find a way to spend more than they are making, and they rack up debt along the way, putting them self in a bad position.

As I was on the phone listening to this person speak, I started to think back to years ago when I was just beginning to get my finances in order.


At times in my life, especially the years just after graduating from college, I’ve found myself with more credit card debt than I’d like to admit.

It’s funny how it can slowly build and build, and then, all of a sudden, you have a mountain of debt that you have to pay off. When I’ve found myself in those situations, it has be simultaneously shocking (I wasn’t paying attention and it hit me all-of-a-sudden), and maddening that I let myself get into that situation in the first place.

One of the things that I battled with was this rationalization for continuing to use my credit cards.

The thought that:

“If I don’t use my credit card I’ll be missing out on points! It doesn’t make sense to NOT use my card, I’m just forgoing benefits. I’d be spending the same money anyways, so why not earn points while spending that money?”

As I sat there on the phone talking to this person, I was having a flashback to those moments in my own life. They were saying the same exact things to me. “I’m not going to stop using my credit cards because I like to earn the points/frequent flier miles/cash back rewards, etc. It just doesn’t make sense for me to not use the cards.”

Oh, but it DOES make sense to stop using your credit cards, especially when you find yourself in high levels of debt, unable to pay off your cards each month.


It’s true, using credit cards with cash back rewards, or some other perk, is a great thing to utilize to get some kind of benefit for the spending you’ll already be doing. But, that all goes out the window if you are a person who overspends and isn’t able to pay off your cards each month. If this is you, you obviously are using too much debt and need to cut back.

Here’s the problem if you continue to use your credit card: You’ll continue to spend the same way you have, and each month when it’s time to make a credit card payment, you’ll rationalize why you shouldn’t pay off extra.


Everyone has some minimum level of cash reserves that they are comfortable having in their bank accounts. For more conservative, risk-adverse people, the number might be quite high. But for others, it might only be in the hundreds, or low thousands.

Whatever your number is, if you are hovering near that number in your account when it’s time to pay off your credit card, you’ll convince yourself that you shouldn’t pay off extra because it’s better to keep some cash handy.

But the benefit of using only debit is that when you get down near that number, then you’d STOP spending all together (at least on the non-essentials).

I did this exact thing in the past.

For example, I would use my credit card to spend $2,000 in a month, and then when it was time to pay my bill, I’d rationalize why I should only pay $1,500 for that month, subsequently adding $500 to my credit card balance.

Doing this once or twice isn’t a bit deal, but doing it repeatedly for a couple years is how you wake up one day in thousands of dollars in debt.


And this leads me back to my original point. If you are struggling with credit card debt you need to immediately stop using those cards, and go to a strictly cash or debit card payment system for all of your expenses.

Yes, you may be leaving some points on the table and “missing out.” But in your current situation, you probably shouldn’t be going on a vacation and cashing in on those frequent flier miles, anyways.

Capably Yours,

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