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After bankruptcy, using debit card for family budget makes sense

Most consumers likely have a pinch of doubt over whether to use a credit card or a debit card. A credit card will increase one's credit score, as long as the full bill is paid timely or early each month. For that reason, Arkansas citizens who wish to maintain existing credit or to improve a declining credit record will generally want to have one or two credit cards for reporting purposes. Alternatively, one may be entering or just completing a bankruptcy, with a strong interest in credit rebuilding, thus mandating the use of one or two credit cards for similar reasons.

After all, the credit score generally does not go up if nothing new is reported to the national credit  bureaus. However, where a family is recovering from an economic setback, and bankruptcy is necessary to expedite a full and timely recovery, then starting off with at least one small credit card is wise. For everything else, however, there are good reasons to use a debit card for everyday consuming and family purchases.

The obvious benefit is in preventing the build-up of a new pile of credit obligations that will have to be paid back at generally super-high interest rates. The worst thing to do when coming out of a successful bankruptcy, after wiping the slate clean, is to immediately build up a new pile of unmanageable debt. Debit cards are budget-friendly. Spending only when you have it is a strong way to regain a secure financial position, as opposed to showing new burgeoning debt in a post-bankruptcy environment.

Some of the rewards and money-back promotions connected to regular credit cards are now being offered to debit card users. Thus, by running one's family expenditures for food, utilities and the like through a debit card, cash rewards will be added to the balance. Furthermore, nothing deters saving more than the excessive use of credit cards. In Arkansas and elsewhere, regaining a good credit record after bankruptcy can be generally supported by the regular use of a debit card connected to the payer's checking account.                                                                                                                                    

Source: money.usnews.com, "9 Reasons to Use a Debit Card Instead of a Credit Card", Paul Sisolak, Sept. 21, 2015

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