Debit cards as bad as credit cards?
"It's a real pain in the rear to get cash only from a bank teller (the end result of cutting the card as suggested). There is a self control issue here that, like weight loss, should ultimately be addressed for a psychologically healthy lifestyle. You don't mention a budget here. A budget is one of the first tools necessary for setting spending limits. Categorizing your money into inviolable categories, such as:  will force you to look at any purchase in context of your other needs and goals. Note that savings is at the top of the list, supporting the aphorism to, ""Pay yourself first."" Make realistic allowances for each budget category, then force yourself to stick to this budget by whatever means necessary. Cash in several envelopes labeled with each category can physically reinforce your priorities (the debit card is usually left at home for now).  Roll remaining funds from each month over into the next month to cover irregular larger expenses, such as auto repairs.  What sort of investing are we talking about? If you are just talking about retirement savings, an automatic deduction of just $50 to a Roth IRA account at a discount brokerage every pay check is a good start. An emergency fund of 6 months expenses is also common financial advice, and can likewise be built from small automatic deductions. In defense of wise use of plastic, a debit card can be a great retroactive budgeting tool because it records all spending for you. It takes a lot more effort to save and enter receipts for cash, and a compulsive spender without a budget is just as likely to run out of money whether or not he uses plastic. You could keep receipts in the envelope you take the cash out of when you're getting started. If you are so addicted to spending that you must cut your debit card to enforce your budget, at least consider this a temporary measure to get yourself under control. When the bank issues you a new card, re-evaluate this decision and the self control measures you've implemented to see if you've grown enough to keep the card." This sounds more like a behavioral than a debit card issue to me TBH. Did you put the money you're putting away into a separate savings account that you (mentally) labelled 'for investment'? That's pretty much what I do (and I have a couple of savings accounts for exactly that reason) and even though I know I've got $x in the savings accounts, the debit card I carry only lets me spend money from my main bank account. By the time I've transferred the money, the urge to spend has usually gone away, even though it often only takes seconds to make the transfer. If your goal is to make it harder for you to use to make impulse purchases then YES.  Having to always have cash for purchases will make you less likely to make impulse purchases you don't really need. If it is one of those debit cards you use just like a credit card without a PIN, I'd cancel it regardless of whatever you are trying to do with your finances. They just seem too dangerous to me.  Unlike a credit card, if someone makes fraudulent purchases on a debit card the money is gone from your bank account until you resolve the issue with the issue. With a credit card, the BANK is out the money until it gets worked out. My brother once had his credit card number (not the card) stolen and the criminals emptied his bank account. Eventually the bank put the money back after an investigation, but it had two really nasty side effects: 1) Dozens of checks bounced. The bank refunded the bounced check fees, but not all of the stores would.   2) He had no money in his account until it was resolved. Luckily in his case they resolved it in a few days, but he was already making preparations to borrow money to pay his rent/bills. How about just stop buying stuff? "Using cash instead of a debit card lets you see in real time how much cash you have left and where it's going.  It's a lot ""harder"" to see the cash disappear from your wallet than it is to swipe the plastic (whether it's a debit or credit card).  Using cash is a way to keep the funds in check and to keep spending within a budget (i.e. you can't spend it if you don't physically have the cash anymore)." Debit cards are the dumbest development ever. I now have a piece of plastic that allows any yahoo to cause me to bounce my mortgage. Great. Throw away the debit card. Use a credit card and exercise some self control. Take out a sufficient amount of cash to cover your weekly incidental expenses under $50. If you want something that costs more than $50, wait a week and use the credit card. You'll find that using cash at places like the convenience store or gas station will cause you to not spend $3 for a slim jim, lotto ticket, donut or other dumb and unnecessary item.
Psychology Today had an interesting article from July 11, 2016, in which they go through the psychological aspects of using cash vs. a credit card. This article cites a 2008 paper in the Journal of Experimental Psychology: Applied that found: “the more transparent the payment outflow, the greater the aversion to spending or higher the ‘pain of paying’ …leading to less transparent payment modes such as credit cards and gift cards (vs. cash) being more easily spent or treated as play or ‘monopoly money.’” The article cites a number of other studies that are of interest on this topic as well. "Banks are in it to make money. But they're expected to provide a social good which powers our economy: secure money storage (bank accounts) and cashless transactions (credit/debit cards).  And the government does not subsidize this.  In fact, banks are being squeezed. Prudent customers dislike paying the proper cost of their account's maintenance (say, a $50/year fee for a credit card, or $9/month for a checking account) - they want it free.  Meanwhile government is pretty aggressive about preventing ""fine print"" trickery that would let them recover costs other ways.  However there isn't much sympathy for consumers who make trivial mistakes - whether they be technical (overdraft, late fee) or money-management mistakes (like doing balance transfers or getting fooled by promotional interest rates).  So that's where banks are able to make their money: when people are imprudent.  The upshot is that it's hard for a bank to make money on a prudent careful customer; those end up getting ""subsidized"" by the less-careful customers who pay fees and buy high-margin products like balance transfers.  And this has created a perverse incentive: banks make more money when they actively encourage customers to be imprudent.  Here, the 0% interest is to make you cocky about running up a balance, or doing balance transfers at a barely-mentioned fee of 3-5%. They know most Americans don't have $500 in the bank and you won't be able to promptly pay it off right before the 0% rate ends.  (or you'll forget).  And this works - that's why they do it.   By law, you already get 0% interest on purchases when you pay the card in full every month.  So if that's your goal, you already have it.  In theory, the banks collect about 1.5% from every transaction you do, and certainly in your mind's eye, you'd think that would be enough to get by without charging interest.  That doesn't work, though.  The problem is, such a no-interest card would attract people who carry large balances.  That would have two negative impacts: First the bank would have to spend money reborrowing, and second, the bank would have huge exposure to credit card defaults.   The thing to remember is the banks are not nice guys and are not here to serve  you.  They're here to use you to make money, and they're not beneath encouraging you to do things that are actually bad for you. Caveat Emptor." In Addition to @JoeTaxpayer's answer, in the UK credit cards offer additional protection than if you were to pay by debit card. This includes (but is not limited to) getting your money back if the company you've bought something from goes bust before your order is complete. Debit cards can be riskier than credit cards. That's why I personally avoid debit cards unless I have a very good reason to go that direction (e.g. HSA accounts).  To explain the risk, consider what happens if someone steals the card or number and starts using it: Credit card: You get a big bill, which you dispute and eventually get dismissed.   Debit card: Your bank account balance drops,  you don't have access to cash, and your checks start bouncing and you rack up bounced check charges with your bank and stores where you write checks. Eventually, you convince the bank it was fraud and they refund the money to your account. The big difference is that while it is going on you are out the money with a debit card, and with a credit card the BANK is out the money. The above scenario happened to my brother and it wasn't pretty. He was having to borrow money to pay his rent and groceries while the bank sorted it out. Don't switch just because you hear people panicking on the talk shows. Banks are competitive business and won't start charging for using debit cards too fast. If and when they decide to do such a thing after all - then start shopping and see who doesn't catch up with the fees and still provides the services you want for the price you're willing to pay. "I also feel it's important to NOT get a credit card. I'm in my mid 30's and have had credit cards since I was 20, as has everyone I know. Every single one of those people, with the exception of my dad, is currently carrying some amount of credit card debt - almost always in the thousands of dollars.  Here is the essential problem with credit cards. Everyone sets out with good intentions, to use the credit card like a debit card, and pay charges off before interest accrues. However, almost no-one has the discipline to remember to do this, and a balance quickly builds up on the card. Also, it's extremely easy to prioritize other bill payments before credit card payments, resulting in a balance building up on the card.  It's almost magical how quickly a balance will build up on a credit card. Ultimately, they are simply too convenient, too tempting for most human beings. The world, and especially the North American world, is in a massive debt crisis. It is very easy to borrow money these days, and our culture is at the point where ""buy now pay later"" is an accepted practice.  Now that I have young children, I will be teaching them the golden rule of ""don't buy something until you have cash to pay for it in full!"" It sounds like an over simplification but this one rule will save you an incredible amount of financial grief over time." Switch to cash for a few months. No debit. No credit. This will help for two reasons: Once you've broken the bad habits, you should be able to go back to cards for the convenience factor. "Well, it took some effort to get an explanation from my bank. Turns out that some supermarkets use direct debit as a method of transferring money for purchases payed by so-called ""EC"" cards here. I was told that for some reason, a supermarket decided to reverse one of such transactions." My guess would be for small merchants there could be a small difference. For large merchants, the cash is also at a cost equivalent to the card fees. Check for my other answer at  How do credit card companies make profit? Lets say Debit is what you pay and Credit is what somebody else pays for you. A Debit card will charge your bank account directly. A Credit card will charge your bank account some time later. In both cases the shop owner has the money available directly. It's called Credit because somebody believes you will be able to pay your debt on time (or later with an interest). As for purchase and sales. A customer buys = makes a purchase. A shopkeeper sells = makes a sale. Note from a bar: I made an agreement with the bank. They don't sell beer, I don't give Credit. Debit cards do not earn the bank any interest from you whereas credit cards do, so they want to give incentive to use credit over debit. "Circa 2002-2005, I was able to successfully ""transfer"" a balance from a debit card linked to a bank account to a Bank of America Visa credit card. As an example, I could say do a balance transfer from the card XXXX-XXXX-XXXX-XXXX (which was a valid debit card number) to the credit card, and the funds would appear in the checking account within a few days, and also the balance on the credit card would go up the amount plus any balance transfer fee. I think they've sealed off that loophole years ago." A hotel can accept the debit card because each night they can withdraw the money. If you don't have sufficient funds they can instantly lock you out of your room. They an also limit your ability to access room service, and other extra expensive options. The rental car can't do that once you have the car. Plus they never know if you will bring the car back with damages, toll charges, and an empty tank of gas. It depends on your bank and your terms of service, but using the card one way or the other may affect things such as how long it takes to process, what buyer protections you have, etc.  It also affects the store as I believe they are charged differently for debit vs credit transactions. Just use a credit card like AMEX Blue that categorizes your purchases, and reconcile at the end of the month. There is no good reason to use a debit card.