Have you ever wondered what the difference is between a credit card and a debit card? Which one’s better? Which one should I be getting? So many questions that we are here to answer! Read along to find out 5 things everyone should know about credit and debit cards.
1. Credit cards use borrowed funds
When using a credit card, you are essentially borrowing funds from your chosen financial institution via a line of credit. At the end of the month/quarter, you repay the funds you have spent with additional interest. If all repayments are made correctly, credit card use can benefit your credit score.
2. Debit cards use personal funds
On the other hand, a debit card uses your personal funds by debiting money directly from your chosen savings account. This eliminates the risk of debt and spending money beyond your means.
3. Both can be used to make online transactions
Online shopping is all the rage! Luckily, credit cards and debit cards can both be used to make online transactions, providing ease and convenience.
4. Credit cards often come with benefits
Most credit cards offer additional benefits which can assist when choosing a credit card. Rewards often come in the form of travel points, discounts and many other perks.
5. Debit cards are relatively more affordable
As debit cards do not charge interest they are relatively more affordable than credit cards.
If you a TMCU member enquire about our Clement Card. An interest-free Visa Card with just a low monthly fee based on your credit limit to get the best of both worlds!