Debit Vs. Credit

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Manage Your Money

Before debit cards, understanding the difference between cash, check, or credit was a lot less complicated! Now your debit card and credit card can be one in the same. It's important to understand the difference between these two types of cards and to know when is best to use debit or credit. 

Overall, it is up to you to decide what you think you can handle. Take time to evaluate your needs, the pros and cons of both cards, and choose what is best for you.

Debit Cards

A debit card is linked directly to your bank account. So, when you use your debit card the money is automatically deducted from your bank account. If you struggle with buying things that you don't need or going over a budget, you should stick with your debit card so that you have a set amount of money you can spend. As you start to create better spending habits, you can purchase some items with credit and practice paying your bill at the end of each month.

Pros Cons
Easier to get than a credit card Does not help to improve your credit score

PIN Protection 

Disputed charges can be difficult to resolve

Can be set up to prevent overdrafts

Can be charged fees for dropping below the minimum requirement

No monthly payments Some banks charge a transaction fee

Credit Cards

A credit card, on the other hand, is using borrowed money to pay for a purchase. When you use a credit card, you will receive a bill for your purchases. If you do not pay your bill in full at the end of each month, the company will charge you interest. If you trust yourself to pay off your bill at the end of each month, you may want to use a credit card in order to increase your credit score.

Pros Cons
Allows you to buy now and pay later Can compel you to spend more money than what you have
Can help you build credit and raise your credit score Can acquire too much debt and ruin your credit score
Helps you make larger payments such as a medical bill Missing a payment can result in late fees
Disuputed charges are easier to resolve than a debit card Paying off a balance after the grace period means paying it back with interest