Debit Card or Credit Card

What is the difference between a debit card and a credit card?

It's the difference between "debit" and "credit." Debit means "subtract." When you use a debit card, you are subtracting your money from your own bank account. Debit cards allow you to spend only what is in your bank account. It is a quick transaction between the merchant and your personal bank account.

Credit is money made available to you by a bank or other financial institution, like a loan. The amount the issuer allows you to use is determined by your credit history, income, debts, and ability to pay. You may use the credit with the understanding that you will repay the amount, plus interest if you do not pay in full each month. You will receive a monthly statement detailing your charges and payment requirements.

What you should know about debit cards:

• Obtaining a debit card is often easier than obtaining a credit card.

• Using a debit card instead of writing checks saves you from showing identification or giving out personal information at the time of the transaction.

• Using a debit card frees you from carrying cash or a checkbook.

• Using a debit card means you no longer have to stock up on traveler's checks or cash when you travel.

• Debit cards may be more readily accepted by merchants than checks, especially in other states or countries wherever your card brand is accepted.

• The debit card is a quick, "pay now" product, giving you no grace period.

• Using a debit card may mean you have less protection than with a credit card purchase for items which are never delivered, are defective, or were misrepresented. But, as with credit cards, you may dispute unauthorized charges or other mistakes within 60 days. You should contact the card issuer if a problem cannot be resolved with the merchant.

• Returning goods or canceling services purchased with a debit card is treated as if the purchase were made with cash or a check.