Debit Card vs. Credit Card

So you’re thinking of holding a debit or credit card? But do you know the difference between the two? Or which one you should get?

Typically, debit and credit cards, even though they may have a lot of differences – have the same function. (Source: “Difference Between Credit Card And Debit Card” from Bank Bazaar; https://www.bankbazaar.com/credit-card/difference-between-debit-and-credit-card.html) Both cards work nearly identical when paying for things like grocery items , but they differ in some aspects. A debit card is linked to your checking account and PIN and your money is being deducted from your account balance. This card can be used for withdrawing from an ATM or getting cashback at certain stores. (Source: “Credit Cards vs Debit Cards: What Should I Use?” by Casey Bond from U.S. News; https://money.usnews.com/credit-cards/articles/credit-cards-vs-debit-cards-what-should-i-use)

Credit cards, on the other hand, are linked to a revolving line of credit a card holder can draw as needed. They offer better cash rewards as compared to debit cards. They also provide incentives for balance transfers.

Debit and credit cards are arguably the popular options to cash in.. The question needed to be answered here isn’t “which one is better?” but rather “When should I use debit or credit card” ? (Source: “Debit Card vs. Credit Card: When To Use Each Type?” from Maya.ph ; https://www.maya.ph/stories/debit-card-vs.-credit-card-when-to-use-each-type-of-payment-card) When To Use Debit Card

• Controlling your spending habits

• Buying from small businesses

When To Use Credit Card

• Earning points

• Establising good credit history

• Buying from foreign shops

• Traveling abroad

Getting both cards have their own pros and cons. Let’s start with debit cards first pros and cons first (Source: “Debit vs. Credit Cards: Pros and Cons of Each” from Cadence Bank; https://cadencebank.com/insights-and-articles/personal/difference-between-debit-and-credit-cards) Debit Cards

Pros

• Help control spending

• Save money on interest

• Get cash

• Highly convenient

• Don’t charge interest

Cons

• Limited fraud protection

• Spending limit depends on checking account balance

• Can cause overdraft fees

• Have no credit score

Credit Card

Pros

• Offer short term financing

• Builds credit history

• Offer cashback or reward programs

• Offer better fraud protection