Just recently Bank of America announced that they would soon be charging a $5 monthly fee for the use of their debit cards. Aside from BofA, Chase and Wells Fargo are also currently testing the market for a planned $3 fee. The reason behind the change are the new federal regulations on how much banks can charge retailers for accepting debit card purchases. These regulations seriously impair the ability of banks to make money from their debit cards. And according to BofA CEO, “Banks have the right to make a profit”. Which brings us to the introduction of debit card fees.

Rumors have it that these banks are secretly hoping that consumers would altogether ditch their debit cards and start charging their purchases with their credit cards. At this time there are no restrictions as to how much banks can charge retailers for accepting credit card payments, giving them the opportunity to earn more. The question now is: should you should start swapping your debit card for a credit card?

First of all, it is important to remember the nature of credit cards. Unlike debit cards wherein you’re only allowed to spend the money that you already have, credit cards give you the liberty to charge within your credit card limit, which may be much more than what you can afford to spend. For those who have the ability to control how much they charge, using a credit card instead of a debit card may be feasible, but for those who “don’t trust themselves” with it, it may be better off to just pay the $5 fee than to find yourself charging a hundred dollars more than usual.

Using credit cards for your usual purchases isn’t a bad idea if you can also discipline yourself to pay the full amount as soon as it’s due. It is also recommended to keep a different credit card for emergencies to keep your daily expense account separate from large purchases. Using credit cards such as Chase Blueprint which allows consumers to pay off smaller incidentals with no interest is also helpful.

One advantage of using your credit card instead of debit is the possible rewards you can get such as cash backs or mileage. Getting a card that offers rewards can be an added bonus to your usual shopping experience.

With the impending debit card fees, would you still use your debit card? Or is it time to switch to credit?