When it comes to paying for everyday purchases, most people reach for either a debit card or a credit card—but do you know the key differences between the two? While both look similar and are convenient, they function in very different ways.
How They Work
- Debit Cards: Linked directly to your checking account, debit cards use your own money to make purchases. When you swipe or tap, the funds are immediately withdrawn from your account.
- Credit Cards: Instead of using your own money right away, credit cards let you borrow from a credit limit set by your issuer. You’ll need to pay back what you spend, typically with an interest charge if you don’t pay the full balance by the due date.
Key Differences (At Freedom Credit Union)
| Feature | Debit Card | Credit Card |
|---|---|---|
| Spending Limit | Limited to available balance | Based on credit limit |
| Impact on Credit | Does not build credit | Helps build credit with responsible use |
| Interest Charges | None | May apply if balance isn’t paid in full |
| Rewards & Perks | We offer AMAZING rewards in two forms: Cash Back and High Yield | No current “points”, cash back, or rewards |
Which One Should You Use?
- Use a Debit Card if you want to avoid debt and spend only what you have. It’s also great at Freedom Credit Union because you get rewarded for having your checking account with us!
- Use a Credit Card if you want to build credit and take advantage of added protections on purchases. Just be sure to pay off your balance each month to avoid interest!
Both cards have their place in smart financial management. Knowing the differences can help you make the best choice for your spending habits!
Looking for rewards? Upgrade or open a High Yield or Cash Back checking account today!
Not a member of Freedom Credit Union? Join today!
