Plastic or Plastic?

Everybody's doing it—according to a Federal Reserve Board report, debit cards are becoming the dominant payment method for consumers.

Before you banish your credit cards to Siberia, consider that debit cards also have their downsides. They don’t help build your credit score like traditional credit cards, they don’t offer the same fraud protection or rewards and if you don’t have enough in your checking account to cover purchases immediately, you’ll pay some hefty overdraft fees.

For the best of both worlds—less debt and more control over spending—use your lowest rate credit card as a “debit card.” Keep track of your checking balance, as you would otherwise, and use that amount as your spending limit. Pret-ty sneaky.

Exception: If you really think you can't control the spending, stick with the debit card—or cash—for a few weeks before you upgrade to your lowest rate credit card. It's much more important to reduce your debt than to build your credit if you're spiraling out of control. Agreed?