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Is Debitize worth it?
A credit card can be a double-edged sword.
On one hand, it can offer perks like travel miles or cash back. It may also help you build your credit score with successful on-time payments. On the other hand, overspending with a credit card can drag you deep into debt if you’re not careful.
Enter Debitize. It’s a free service with a simple proposition: to help you enjoy the benefits of a credit card and avoid racking up late fees, interest or debt. In other words, Debitize effectively “debitizes” your existing credit cards, transforming them into debit cards.
Debitize has been purchased by Trim
Since the time of this writing, Debitize has been purchased by Trim, a personal finance assistance app. As a result, Debitize is no longer available for consumers.
If you’re looking for some help managing your credit card finances, consider the Petal Card. This credit card features an app that can help track your spending and keep you abreast of your spending habits. The Apple Card is also slated to feature similar features and some credit card apps also features ways to keep your spending in check.
To use Debitize, you’ll need a checking account and a credit card. Link these to the service, then wait for the magic to begin.
As you spend on your credit card, Debitize pulls funds from your checking account every day. For example, if you buy a $3 coffee with your card, Debitize automatically debits that amount from your checking account.
The debited money goes into a Debitize account from your checking account, which the service uses to automatically pay your credit card statement before it’s due at the end of the month.
With debitize, you can’t put more purchases on your credit card than you can pay for with the amount in your checking account, This prevents you from forgetting or not being able to pay your credit card bill every month.
What is this app good for?
- Students and teenagers learning how credit works
- Reducing spending and sticking to a budget
- Improving your credit score with responsible spending
- Avoiding late fees from forgetting to pay your monthly statement
So, what’s the big deal?
To understand the appeal of Debitize, look at the pros and cons of credit and debit cards.
A credit card can have several benefits.
- Rewards. Cash back, miles and points are some of the sweetest perks of using a credit card. Essentially, you get free money just for using your card.
- Building credit. As you spend with your credit card and pay off your balance, you build up your credit score. A good credit score makes it easier to obtain loans for a car or home. It may even help when you apply for a job or try renting an apartment.
- Fraud protection. Card companies offer robust protection against the fraudulent use of your card. You’re rarely on the hook for unauthorized purchases.
Meanwhile, there’s a few unsavory aspects of having a credit card.
- Late fees. Miss your statement due date? Expect a fat late fee.
- Temptation to spend. It’s easy to get into a “spend now, pay later” mentality with plastic. If you’re not careful, you could quickly find yourself deep in debt due to ever-increasing interest.
- Your credit score is on the line. If you pay your card bill late, you can expect a hit to your credit score.
Now, consider the benefits of a debit card. Because you don’t have a card bill to pay, you pay no late fees. And there’s no risk of your credit score dropping. Also, you can only pay with money you have in the bank.
That’s the appeal of Debitize. Because it pulls money from your checking account as you spend, it lets you enjoy the benefits of an existing credit card without exposure to the risks.
Cost, eligible credit cards and more
It’s free to sign up for and use Debitize.
If you want to use the service’s Credit Optimizer, you’ll pay $3 a month.
Credit Optimizer pays your credit card balance weekly instead of monthly. This keeps your balance low, which in turn helps you maintain low credit utilization.
What is credit utilization — and why is it important?
Debitize’s features include:
Paying your card bill automatically.
- Debitize pays your card bill for you, so you’re never hit with a late fee.
- However, without Debitize, you can simply set up autopay with most credit card providers to do the same thing.
Keeping your credit card balance in check.
- Debitize’s Credit Optimizer pays off your balance weekly, which helps you avoid going over your credit limit.
- Debitize also claims this keeps your credit utilization low. However, most credit card companies report your card balances monthly, not weekly, so this might not affect your utilization ratio.
Keeping you from getting into debt.
- This is arguably the best reason for using Debitize. Essentially, you can use your credit card only when you have the money to pay off your purchase.
- However, you may not need Debitize’s help if you spend responsibly and consistently pay off your bills.
How to sign up for Debitize
- Visit the Debitize website and click Get Started. Then click Let’s Do This.
- Create an account by entering your full name and email address. Then create a password.
- Link the credit card you wish to use with Debitize.
- Enter your bank account details.
- Enter ID details.
Debitize could be a solid option if you have trouble limiting your spending or if you have difficulty keeping up with bill payments.
The service essentially turns your credit card into a debit card, which means you get the benefits of a credit card while consistently paying off your purchases. Debitize could help you keep spending in check and make sure your credit card statements are paid on time.
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