Debit Card VS Credit Card: Which One is Right For You?

by Allison Ryan
Apr 21, 2023

When it comes to managing your finances, you’ve probably wondered whether you should have a debit card, a credit card, or both! Keep reading to learn the basics of each and to figure out which one is right for you.

Woman Holding Phone and Debit/Credit Card

A debit card is usually a Visa or Master Card and is issued by banks to checking account owners. The card allows you to make purchases while immediately deducting the purchase amount from your account.

 Basically, you can only spend as much as you have in your account. You can use a debit card practically anywhere you’d use a credit card.

NOTE: Some places may place a “hold” on your account for more than the purchase amount. Make sure you have enough in your account to cover your purchase(s).

A credit card allows you to buy goods and services based on your promise to pay for them.

The Difference Between Debit and Credit Transactions

Debit Transactions  Credit Transactions 
  • Require a PIN
  • Funds are not deducted automatically

NOTE: This can cause errors in account balance information potentially leading to overdrafts
  • Funds deducted immediately based on available funds in account
  
  • Used at any automated debit/credit card machine

TIP: One of the BEST ways to avoid ATM fees is to use the ATMs at your bank or use the "cash back" option when making retail purchases

  

 

Tips for Protecting Your ATM Card

Use these tips and others from the ABA to help protect your ATM Card:

  1. Keep your card in a safe place and never leave it lying around your house or desk at work. Remember: no one should have access to the card but you.
  2. Keep your PIN number a secret and make sure it’s not a string of numbers easily guessable (ex: your birthday or 1234)

Click here to read more about ways to protect yourself from online fraud.

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