What’s the Difference Between a Credit and Debit Card?
What is the difference between a credit card and a debit card? Some might think that they’re similar since they’re both used to make purchases. Though dDespite their similarities in use, they do have their key differences. Learning more about them will help you decide which one to get. Read on to learn more about the different advantages of the two.
What Is a Debit Card?
A debit card is directly connected to your savings or checking account. When you make a purchase with this card, it automatically deducts the balance from your bank account. This can be advantageous for people who want to save money. Here are some pros of using a debit card:
- Lessens Chance of Getting Into Debt - You won’t be tempted to overspend and you will be able to stick to your budget since you’ll be getting money directly from your savings or checking account.
- Easy-Access to Cash - Debit cards allow you to withdraw cash from an ATM.
- More Savings - You won’t have to pay annual fees or interest when using a debit card.
What Is a Credit Card?
With a credit card, you can make purchases much like a debit card. But, the main difference is where the money comes from. Banks and financial institutions give you a line of credit that you can use for expenses and pay at a later date. Essentially, banks are lending you money for your purchases and they allow you to be more liquid. Advantages of credit cards include:
- Increases Credit Score - Being a responsible credit card user increases your credit score. Having a good credit score allows you to apply for a higher loan amount and have more favorable interest rates when making big purchases.
- Earns Rewards - Depending on your bank and credit card, you can earn points that can be claimed as air miles, or even cashback. Racking up these rewards will help you save for future purchases.
- Provides Privileges - Some credit cards can give you special rates and other privileges in dining establishments, travel, and even retail.
Apply for a Credit or Debit Card Today!
Now that you know the difference between a credit card and a debit card, contact Liberty National Bank today. We provide safe and secure debit and credit cards to make purchasing more convenient for you. Get in touch with us to learn more about what we offer.