Credit Card Spending Is Down This Holiday Season. Should Your Card Stay in Your Wallet?

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • A recent TD Bank survey found that 42% of Americans plan to use debit cards as their primary payment method for their holiday shopping.
  • Debit cards may help you avoid credit card debt, but they have some disadvantages.
  • Because of their many benefits, you may want to keep your credit cards and put them to use.

If you're not using your credit cards often, does it make sense to keep them?

Throughout the holiday season, consumers are spending extra money on gifts. You may assume that credit cards are the preferred way to pay for gifts, but it turns out that many shoppers are using debit cards instead. Have you been using your debit card more frequently? You may wonder if you should get rid of the credit cards that you have in your wallet. Find out why you may want to keep them.

Shoppers are using debit cards to buy presents

TD Bank recently surveyed 1,000 Americans to learn more about their shopping and spending habits. The study found that 42% of respondents planned to pay for holiday purchases using debit cards.

Considering the high cost of purchases, it's likely that shoppers are looking for ways to manage their spending better and avoid going into credit card debt. Using money from their bank accounts rather than charging purchases to a credit card may be one strategy that helps.

Featured offer: save money while you pay off debt with one of these top-rated balance transfer credit cards

While using debit cards is convenient and may help you to stay on budget, you may want to consider holding on to the credit card in your wallet. They offer valuable benefits and can help you build credit if you use them with care and pay your bills on time.

Pros and cons of using a debit card

Have you been using a debit card while completing your holiday shopping? If so, you're not alone. When you use debit cards, you're paying with funds in your checking account. That means you aren't borrowing money like you do when paying with a credit card.

Here are some of the pros that come with using a debit card:

  • Debit cards may help you avoid overspending. If you're working on improving your budgeting skills and want to avoid overspending with a credit card, a debit card may help you stay on track.
  • They're accepted almost anywhere. Most retailers accept debit cards as a form of payment, which makes for an easy way to pay for your purchases without having to carry around cash.
  • You can avoid paying annual fees and interest charges. If you're looking to avoid paying annual fees and want to avoid costly credit card interest charges, using a debit card is one way to do so.

But it's important to remember that debit cards aren't without flaws. Here are some of the cons that come with using a debit card:

  • You won't earn rewards: Most debit cards don't offer rewards and if they do, they're minimal. When you use rewards credit cards, you can earn cash back and other valuable rewards.
  • Your money will be in limbo during the dispute process: If you need to dispute a transaction, your checking account balance will be impacted while you await a resolution. That's because the dispute process can be lengthy. Since you paid with cash from your bank account, you may find yourself in a difficult financial situation until a resolution is reached. When making a credit card dispute, your money isn't impacted.
  • You put yourself at risk for overdraft fees: If you use your debit card and don't monitor your spending, you may risk spending too much. If you overdraw your account, your bank may charge overdraft fees -- checking account fees can get expensive.

Don't be in a hurry to ditch your credit cards

If you have one or more credit cards in your wallet, you may want to use them. This payment solution offers many benefits. If you're using your debit card to avoid overspending, other techniques could help you stay on top of your personal finance goals.

One option is to use budgeting apps to set spending limits and monitor your progress so you don't charge more than you can afford. It's possible to avoid interest charges by paying off your entire credit card balance. You might also set up spending alerts through your card issuer. If you hit your spending limit, you'll be notified and can make adjustments.

Before using your debit card at the checkout line, consider whether you can benefit from using a credit card instead. Are you looking for a new credit card? Check out our list of best credit cards.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow