Let’s talk… College Series: Debit vs. Credit Cards!

Debit and credit cards are two of the most common financial products that are at our disposal. While these two plastic cards are very similar, they are quite different and should serve you in different areas of your spending.

Debit cards work like checks. When you make a purchase, it takes money directly out of your bank account. It’s pretty simple and money comes out of your account as soon as you swipe.

Credit cards are like loans. When a credit card is opened, you are approved for a certain line of credit. Every month you receive a bill that includes what you owe, minus any credit, and any other leftover payments. If you are not able to pay your bill in full, it will collect interest until paid off.

From building good credit history, to managing fraud better, all the way to earning rewards and benefits, credit cards are much more enticing than debit cards. On the other hand, debit cards provide fast access to cash and make it difficult to spend money that you don’t have. Both have their pros and cons, and it’s important to weigh what you are looking for.

The content in this material was created for educational and informational purposes only and is not intended as an investment advice.