How to transition your spending from a debit card to a credit card

20.11.2024 - 17:51 / thepointsguy.com

If you've been using your debit card for all your purchases for years — carefully tracking your checking account balance and not spending more than what you have in the bank — shifting your spending to a credit card can be a big change.

I used to be one of those people who paid for everything with their debit card because they were afraid of racking up debt. I thought debit cards were the safe spending option since you can't spend more money than what you had in your account. I thought that was what financial responsibility looked like. However, my perspective changed as my interest in travel grew, and I learned that I could earn big rewards by signing up for and using credit cards.

Maybe you already have a rewards credit card but are hesitant to shift your spending to credit cards. You've possibly signed up for a credit card and charged enough to meet the minimum spending requirement for a bonus, but after that, you always return to using your debit card. If you've been on the fence about switching your spending from debit to credit, here are a few tips to help you make the change.

Related: Credit vs. debit cards: Which is the smarter choice?

When I first decided to shift my spending to credit cards, I knew I wanted to be a responsible credit card user. I didn't view a credit card as free money or a long-term loan to repay over time through minimum payments. I didn't want to pay interest, which meant not charging more than I could pay back each month.

One thing that helped me is that I treated my credit card just like my debit card. That meant not spending more than I had in the bank. Even though my credit card did not withdraw directly from my checking account for every purchase (as my debit card did), I acted as it did.

Maybe you made only minimum payments on credit cards in the past. If so, paying it in full will require adjusting your mindset. View your credit card just like a debit card. Don't spend more than you can pay back every month.

Related: The best way to pay your credit card bills

You'll want to avoid accidentally exceeding your credit limit on a lower-limit card. If you do, transactions may be declined, or you may be charged fees. But you also shouldn't view cards with high limits as available money for maxing out.

Keeping your balance within a reasonable limit of your available credit can boost your credit score. Your credit utilization ratio makes up 30% of your FICO score, so keeping your balance in check is important.

Related: TPG's 10 commandments of credit cards

Maximizing your points- and miles-earning often involves strategizing which cards to use for different purchases. As many cards come with category bonuses — bonus points for different types of spending, such as