Credit vs. Debit

I've always contemplated the benefits of credit vs. debit, but I remain torn as to which to use. I am learning to settle with... Both.

Debit:

It's like having cash, so purchase amounts are instantly deducted from your checking account value. There's no remembering to pay your credit card bill. Nice!

You'll never pay a penny in interest therefore, and odds are your checking account doesn't pay interest, so you're not missing any extra interest revenue. It's a win-win!

Technically, you're never indebted to anyone at any time (unless you overdraw your account). Talk about easing your conscience...


Credit:

You have the ability to dispute a charge that you believe stems from fraudulent roots. For example, the product you receive is worth much less than you what you anticipated, or perhaps you accidentally got double charged.

You have the ability to charge purchases all the way up to your credit limit. Essentially, you don't really have to worry about not being able to pay for something. Debit cards limit your purchases to the amount of money in your checking account at the time, and banks sometimes even charge for each debit card transaction.

Many credit cards have no annual fee, and even offer rewards for using them! Assuming you remember to/can afford to pay your fill in full, on time, you can actually become better off by using the credit card.

If you have a checking account that pays interest, and you pay your credit card bill from that checking account, then delaying payment for purchases by using credit can improve your interest income.

Using a credit card appropriately almost always improves your credit, which is important for when you go to attain a mortgage or lease later on for something that costs much more (i.e. a house or car for tens or hundreds of thousands of dollars).

What to Use When/Where:

What I recommend:

Items that are unlikely to need returning, like groceries or gasoline, should be purchased on debit. In doing so, you've paid upfront, and never have to worry about paying your bill or having interest accumulate on those purchases. Use debit on things that will be consumed right away or in a short amount of time.

Use credit to purchase items that have the possibility of being defective (i.e. electronics equipment), or for larger purchases that your bank may restrict your debit account from paying. With credit, if you're ripped off then you have legal rights and the support of your card company in returning the item and/or not paying for the defective item.

It would appear as though there are more benefits to using credit than debit, but I feel that the reasons for using debit hold a fair amount of weight in themselves.