Daybreak: Consumer News

04:55 AM CDT on Tuesday, April 5, 2005

Consumer Reports

Plastic is king. We're using credit and debit cards more often than ever. At this point, the plastic of preference is debit cards.

Consumers Union, the publisher of Consumer Reports, says debit cards are a better choice in many cases—but not always.

With a debit card, your money is immediately deducted from your bank account. Gail Hillebrand of Consumers Union, the publisher of Consumer Reports, said it's better than a credit card when you're buying groceries and other routine purchases.

"We recommend against using your credit card for everyday purchases because many people don't have the discipline or ability to make that big payment at the end of the month," Hillebrand said.

If you're shopping online, credit cards are a better choice. "You have a right to undo that charge if the goods never arrive or if what arrives is not what you ordered," Hillebrand said. "You don't have that protection with your debit card—only with your credit card."

There's another downside with debit cards: Some banks charge fees to use them.

If yours does, Consumers Union says, find another bank or—if you have the option—sign for your debit card purchases. That's because banks are more likely to charge a fee when you use a PIN number.

One more advantage with credit cards: Many give you frequent flyer miles and other freebees. Only a few debit cards come with these kinds of bonuses.