Debit or Credit?
Dec 01, 2020
Not sure when to use one vs. the other?
Both debit and credit cards offer a convenient way to pay for things, however it is important to know
the differences between them. A credit card is a form of revolving credit. When you spend with your
credit card you are borrowing, and you pay interest if you carry a balance. With a debit card, you are
paying with your own money. The card is linked to a bank account—usually a checking account—and
the money is withdrawn as soon as you make the transaction.
If you are looking to control your spending but access your cash on the go, debit cards are the choice for you. They are great for:
- people who don't have or want to use credit cards or submit an application.
- making everyday purchases that you have budgeted for because the money comes directly
out of your account.
- accessing cash at ATMs or retailers that offer cash-back at the register.
- helping you stick to a budget you can afford. (You can’t get out of debt if you keep charging.)
- paying on-the-go via your mobile wallet.
- avoiding late fees, interest charges or annual fees.
- increased card security. Your PIN adds a layer of security
If you want flexibility or spending power in an emergency, a credit card is a great option. Credit cards offer a variety of benefits such as:
- purchase protection, which makes them a great option for online and large purchases.
- helping you build (or rebuild) your credit.
- travel rewards, cash back, balance transfers and other perks. (Always read the fine print so you’re not paying more than you intend in fees or interest rate charges just to get rewards.)
- access to spending power in an emergency
The information herein is general/educational in nature & should not be considered financial or legal advice. Consult an attorney or finance professional regarding your specific situation.