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Savings And The City: How To Get Smart about Using Debit to Avoid Debt

By Nicole Bustamante

As I sat and stared at my monthly bank statement, I couldn’t help but wonder: how on earth was my credit card bill that high?


Any good Sex and the City fan knows that Carrie Bradshaw’s lifestyle was just…too good to be true. Those Manolos, on that writer’s salary? Even in a rent-controlled apartment, there is no way she could afford the ultra-glamorous brands lining her suspiciously spacious New York City closet.


The team over at giffgaff gameplan crunched the (hypothetical) numbers and found that by the end of Season 6, Carrie Bradshaw would have been $163,000 in debt. Turns out that charging everything to her credit card was not the best way to live out those NYC dreams. We learned many lessons from Carrie, but how to manage our finances was not one of them. 


If we could give her any advice, we would tell her to use her debit card to do the work of a credit card—without the high interest and fees—by paying later with Zip (maybe we can get this advice to her before the reboot starts filming). Let’s break down exactly how you can use your debit card as a credit card so you can avoid Carrie’s mistakes en route to living your best life. 


Debit vs. Credit


Carrie may like her money to be hanging in her closet, but we still prefer to keep ours in the bank. There are two main types of cards that you can open with a traditional bank account: a debit card or a credit card. These two cards differ in one main way, which is where the money for any given purchase is drawn from.


The formal definition of a debit card is a “payment card that deducts money directly from a consumer’s checking account to pay for a purchase.” When you use a debit card, the money you spend is taken straight from the cash in your checking account in a simple online transaction.


In comparison, a credit card is defined as a card that “allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment.” When you use a credit card, the money you spend is charged to a line of credit. A line of credit is a predetermined, maximum borrowing limit that you can spend up to. 


When you use a credit card, you are agreeing to pay off whatever credit you “spend” at a later time. The amount of credit you are allotted depends on multiple factors, such as how quickly and effectively you pay off your credit card bills and how long you have been with your credit provider


Can I Use My Debit Card as a Credit Card?


This is a bit of a tricky question. Typically when you think of a credit card, you think of paying off a purchase at a later time, but this is not the case when you use your debit card as a credit card.


If you use your debit card and the option to choose either “credit” or “debit” pops up when a payment is being charged, you are being asked how you want the purchase to be processed. Selecting credit makes this an offline purchase where the amount will be pulled out of your checking account in about two to three days, after the merchant has reconciled their sales with the respective card providers. Selecting the debit option means that the amount will be withdrawn immediately. 


At the end of the day, there isn’t much difference between the two options. Selecting credit means that you don’t have to enter your PIN and the amount will be withdrawn a few days later, while selecting debit does require your PIN and immediate withdrawal. Either way, the money will be taken from your account soon after the transaction, so don’t use your debit card for purchases that you don’t have enough funds to cover.


It’s important to understand that paying with your debit card means that you cannot pay off your purchase at a later date. That is, unless you choose to pay with a credit card alternative like Zip.


Benefits of Credit Card Alternatives


Before you recite, “Here lies Carrie. She had two loves and lots o’ shoes,” consider getting your spending in check with a buy now, pay later service. 


Zip specifically is a pay later app that splits any purchase into four payments over six weeks. Using it is a brilliant way to use your debit card as if it were a credit card to pay off an item at a later date. Zip has no sneaky, hidden fees, you can get approved for it instantly, and you can use it to shop anywhere—online or in-store. Heck, you can even use it to pay your bills.


For many shoppers, using Zip with a linked debit card is an effective way to avoid credit card interest while budgeting for larger purchases over time, or just to align everyday purchases with your pay cycle. At the end of the day, you should look at your finances and spending patterns to determine whether a credit card or a buy now, pay later app is for you.


When Can I Start Taxi-Hopping Again?


We imagine this would be one of the essential questions from Miss Bradshaw. If you’re taking an old-fashioned yellow cab, you might have to keep cash on hand—in which case, we suggest taking the subway as a more budget-friendly alternative. But if the taxi comes equipped with a credit card reader, you’re in luck: you can pay later by adding Zip to your Apple Wallet or Google Pay. 


Whatever you choose to spend your money on, using Zip to stretch the payment over four installments will help you avoid the high interest and fees that come with a credit card and keep your weekly spending on track.


As Carrie would write, “In a city like New York, with its infinite possibilities, have credit cards become too much to handle?” Decide for yourself: download the Zip app to check out the better way to pay and start splitting your payments in 4 anywhere you shop.


Get started with Zip today

Zip’s editorial content is not written by a financial advisor. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

About the author
Nicole Bustamante

Nicole Bustamante is a writer and journalist passionate about storytelling and the art of fashion. She has written for The Zoe Report, Angeleno Magazine, Modern Luxury Interiors California, and more in addition to writing for her personal blog.