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

May 18, 2021

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

I used to be one of those people. You know, the ones who pay for everything with their debit card because they’re afraid of racking up debt. I thought debit cards were the safe spending option — you can’t spend more money than what you have in your checking account. I thought that was what being responsible with my money looked like. But as my interest in travel grew, and I learned that I could earn big rewards by signing up for and using credit cards, my perspective changed.

Maybe you already have a rewards credit card or two, but have been hesitant to completely shift all of your spending to those credit cards. You’ve possibly signed up for a credit card and charged enough to meet the minimum spending requirement, but, after that, you always return back 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 in the transition.

In This Post

Adjust your mindset

Back when I first decided to shift my spending to credit, I knew from the start that 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 pay back for years by only paying the minimum amount due. I didn’t want to pay interest, so that meant not charging more than I could pay back the following month.

One thing that helped me when I first began using a credit card for all of my purchases 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 like the debit card, I still treated it like so in my mind.

If you’ve previously been the type to only pay the minimum amount due on your monthly credit card bill, paying it in full will require an adjustment to your mindset. View your credit card just like a debit card. Don’t spend more than you can pay back every month.

Related: TPG’s 10 commandments of credit cards

Know your credit limit

You’ll want to avoid accidentally going over your credit limit on a lower-limit card as transactions may be denied or you may be charged fees. But you also shouldn’t view cards with high limits as available money to max out. Keeping your balance within a reasonable limit of your available credit will also help boost your credit score. Your credit utilization ratio makes up 30% of your FICO score, so it’s important to be mindful of keeping your balance in check.

Start with just one card

(Photo by Summer Hull/The Points Guy)

Maximizing your points- and miles-earning often involves strategizing which cards to use for different purchases. As many cards come with category bonuses — that is, bonus points for spending at merchants whose business is classified under certain merchant category codes — it can be quite lucrative to use different cards for different purchase categories. That might mean using an American Express® Gold Card for 4x points on restaurants and U.S. supermarkets (on up to $25,000 in purchases per calendar year, then 1x), and switching to the Citi Premier® Card for 3x points when it’s time to fill up the gas tank.

But if you’re new to travel rewards and using your credit card for everything, having to remember which card to use for gas, which one to use for groceries, which one for restaurants, which one for your Amazon purchases, etc., can be overwhelming.

A good way to maximize points earned using only one card at a time is through new card sign-ups. Open a new credit card and use only that card to meet your minimum spending requirement, being sure to pay off your balance in full every month.

Once that’s complete, apply for another card and shift all of your spending to that card. You’re generating lots of points by receiving sign-up bonuses, even though you may not be utilizing all of the bonus categories that you could by juggling multiple cards. But remember that some issuers — including American Express, Chase and Bank of America — limit the number of cards you can be approved for.

Once you’re comfortable with your ability to consistently pay your balance off in full every month, you can add more complexity, like switching your spending to different cards to take advantage of category bonuses.

Shift any automatic payments to credit cards

Automatic payments certainly make life easier by knocking one more thing off the to-do list. If you have some transactions that automatically withdraw from your checking account or debit card, but you’re using your credit card for other purchases, it can make tracking your finances a little trickier because there’s more to manage. Keep it simple by shifting as many automatic payments as you can to your credit card.

Now you likely won’t be able to use your credit card to autopay bills like your mortgage or car payment directly to the bank or loan company, so you’ll still have to track those in your checking account. Yes, there are services that will accept your credit card for a fee and will send a check to your loan company or other merchants, but you’ll have to weigh whether the fee is worth it for you.

For your other bills — such as cellphone, utilities, fitness club membership, streaming services — it should only take a few minutes to update your payment online and then you’ll easily start earning rewards for those purchases.

Review your transactions

(Photo by My Agency/Shutterstock)

Whether you check your credit card account daily or do a single review with your monthly statement, it’s important to take the time and make sure all of your transactions post correctly. You’re not just reviewing transactions for the correct amounts, but you’ll also want to review your points earned and make sure all points post as expected. And check for any statement credits you expected to receive, such as Chase Offers or Amex Offers.

Set up autopay or schedule manual payments

You don’t want to forget to pay and be charged late fees and interest. While some card issuers may waive late charges and interest as a one-time courtesy, you definitely don’t want to get in the habit of paying late.

Determine a payment schedule that works best for you: Some people pay weekly, others pay once a month. If you’re afraid of overspending and not having the money in your checking account to pay the bill, don’t wait until the due date. You can make multiple payments during the month, even paying off balances daily or weekly.

Either set up autopay to pay in full or at least autopay the minimum balance by the due date if you’re concerned you may forget to pay manually.

Bottom line

As a long-time travel rewards enthusiast who spends a lot of time and energy learning how to maximize my spending and earn rewards, it can sometimes seem like everyone is always signing up for new credit cards and spending thousands of dollars on their cards to generate points for first-class airfare redemptions and luxury hotel stays.

But that’s definitely not the case. Even still, I sometimes find myself surprised when a friend or family member pulls out their debit card to pay for a purchase. However, I understand that even though they may be interested in travel rewards, making the move from debit to credit can be nerve-wracking.

Switching from debit to credit is one of the best money moves I’ve made — my only regret is not doing so sooner!

Featured photo by robertindiana/Shutterstock.

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