Debit and Credit Cards – What's the Difference?
Lillian has finished her grocery shopping and is about to pay for her items. There's a line of anxious customers behind her. She doesn't carry a lot of cash, so she pulls two cards from her purse – a debit card and a credit card. She recently received a free debit card with her checking account, but doesn't know how to use it. Is it the same as a credit card?
This is a scenario faced by many people. Since debit and credit cards often look alike, it can be difficult to tell the difference. Both cards have unique qualities that can benefit the cardholder in various ways.
The Merits of Debit and Credit
Here are the main differences between the two cards:
A debit card is like writing a check. When used to make purchases, the amount is automatically deducted (subtracted) from your checking or savings account. Just as if you were writing a check, you need to know how much money you have to work with. If you spend more than you have in your account, you could overdraw it (if you were writing a check, it would be called a "bounced check") and may have to pay a fee. Keeping a written record of your spending in your check register can help you avoid this situation. Otherwise you can track your account balance with CU Online.
A credit card can also be used to make transactions, but unlike a debit card, you're "borrowing" the money. It will need to be paid back with interest, according to the terms of the card. If you're careful about paying your bills on time, a credit card can be a worthwhile spending tool.
Which Do I Choose?
Using a card is less time-consuming than carrying and
counting cash or writing a check. Wings Financial gives
you many financial choices. Depending on your spending
habits, you may wish to have both a Wings Financial Visa®
Check Card (debit) and a Wings Financial Visa® credit card
(Classic or Platinum), or you may prefer one over the other.
To apply for a credit or debit card or to learn more, stop by
a branch or call us at (800) 692-2274, option 2.
This publication does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material. Images may be from one or more of these sources: ©Jupiterimages, ©Getty Images, ©iStock, ©PhotoSpin.