Should you use a credit card or debit card for automated pay subscriptions?

Couple reviewing financial institutions

When it comes to managing your bills and recurring transactions, choosing the right payment method is essential. Many individuals wonder if it's wise to use a credit or debit card for these automated pay subscriptions. We're here to shed light on the subject and help you make an informed decision.

Using a Credit Union of Colorado Visa card for your regular monthly bills and subscriptions offers several benefits that can enhance your financial well-being. Let's explore why opting for a credit card may be advantageous.

Keeping Your Card Active and Open

When you consistently use a credit card for your transactions, you ensure the account remains open and active. This is important because dormant cards may be subject to closure by the issuer. Credit card companies have varying policies regarding account inactivity, and it's crucial to review the terms and conditions of your cards. By using your Credit Union of Colorado Visa card for recurring transactions, you maintain an active card, preserving your available credit. This helps keep your credit utilization rate low and positively impacts your credit score. Additionally, maintaining an open credit card account for an extended period contributes to a longer average age of credit history, which further strengthens your credit profile.

Protecting Yourself from Fraud

Credit cards provide built-in fraud protection, giving you peace of mind regarding unauthorized charges. The Fair Credit Billing Act limits cardholders' liability to a maximum of $50 for unauthorized charges, and many credit card issuers go even further by waiving cardholder liability entirely. This protection is crucial in case your account information is compromised. On the other hand, debit cards have different rules. If fraudulent charges occur on your debit card, the funds are directly deducted from your bank account, and the process of reimbursement can take time. Moreover, you might be liable for more than $50 in charges. By using your Credit Union of Colorado Visa card, you benefit from the added security measures and safeguards against fraudulent activity.

Have A CUofCO Visa Rewards or Signature Card? Unlock More Rewards and Perks

With our Visa Rewards and Signature credit cards, you have the opportunity to earn points, cashback, or other valuable rewards for your regular purchases. Whether you're buying groceries, filling up on gas, dining out, or booking a hotel, using your Credit Union of Colorado Visa Rewards and Signature cards can earn you rewards for your everyday expenses. Additionally, our Visa Signature card comes with enticing sign-up bonuses, such as a $200 cashback offer, after making $2500 in purchases within your first three months of activation.  

Responsible Credit Card Usage

While the benefits of using a Credit Union of Colorado Visa card for automated pay subscriptions and daily expenses are significant, it's crucial to exercise responsible usage. Creating a budget and closely monitoring your balances is essential to ensure that you don't accumulate excessive debt. Make it a priority to pay off your credit card balance in full each month, avoiding interest charges. If unexpected circumstances affect your budget, aim to keep your balance at or below 30% of your credit limit to safeguard your credit score.

Take control of your finances with Credit Union of Colorado and unlock a world of possibilities.