Credit Cards vs. Debit Cards

Debit cards are an alternative to credit cards with some major differences. Debit cards withdraw money directly from your checking account, and although they may have a MasterCard or VISA logo your available credit limit is the money you currently have in your bank account.

Debit cards are accepted by merchants for goods and services, usually consumables like; groceries, gas, meals out, and clothing. You are actually paying cash for these items just as though you handed the merchant money instead of plastic. You generally can only spend what you have unless you have an “overdraft” account which will cover a little more.

Credit Cards are borrowed money, used for a variety of items. It’s the “buy now, pay later” plan. This works if you have the money to pay later, but can become a credit trap if you spend more than you can pay back later because you “thought you could”.

DEBIT CARDS

• Your money, direct access to your account
• No interest or finance charges
• Do not report activity to credit reporting bureaus, not useful for building credit scores
• Works in ATM’s for cash with PIN number or at “point of Sale” for merchandise without PIN
• Point of Sale transactions come directly from your bank account, no monthly bills, but no time delay either
• If stolen, can give thief direct access to all your money with limited protection against misuse and theft
• Must keep track of spending in check book so you don’t get overdrawn

* This online application is subject to the terms and conditions as described in the Important Information Section of the application.
*See the online credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the “Apply Here" button, you can review the credit card terms and conditions on the cooresponding card issuer’s website.

CREDIT CARDS

• Borrowed money, must be paid back
• Costs you finance charges, interest charges, dues and fees
• Reports your habits to credit bureaus. May help or hurt your credit score depending on your spending and payment habits
• Credit limit generally higher than cash on hand would be
• Can get cash as “cash advances” costs more in interest and finance fees
• If stolen you are only liable for the first $50 taken

Both kinds of cards have their positives and negatives. The biggest negative on the debit card is the issue of stolen or unauthorized usage. This could cause you to lose a great deal of money. It’s always a good idea to have a separate account for the debit card so that any thief is limited on the amount he can steal.

Safety TIPS

To safeguard your debit card, follow these measures.

• Sign your card as soon as you receive it.
• Report a lost or stolen card immediately.
• Always review your statements and report any unauthorized charges immediately.
• Keep the phone number and name of your card issuer in a safe, secure place.
• Choose a PIN that no one else could possibly know or guess.
• Memorize your PIN and never give it out or write it on the card, the card sleeve or on anything else you keep in your wallet or purse.
• Shield the screen and keyboard when you are entering your PIN.