Debit, Credit, or Both?

Key Takeaways:

• Debit cards work like checks, withdrawing funds automatically from the balance in your account, interest free.
• Credit card charges can be paid over time, with interest after a standard number of days.
• Both credit cards and debit cards come with fraud protection.
• Depending on the card, both credit and debit cards may offer rewards. 
• While debit cards don’t have an annual fee, some credit cards do.

Both debit cards and credit cards have a few advantages over cash and checks. Carrying cards can be safer than carrying cash, and if your cards are lost or stolen, you have Zero-Liability Fraud Protection.¹ You don’t have to cover what an unauthorized user withdraws from your account or charges to it. 

Cards can also be more convenient than writing checks and are accepted at places where checks aren’t. 

Depending on the type of card you have, you can get access to helpful online monitoring tools to track your spending, manage your budget, and generally keep a closer eye on your finances. You may even be eligible for rewards like cash back or travel points.

Debit vs. Credit Transactions

The biggest difference between debit and credit cards is that debit cards withdraw funds automatically from the balance in your account interest free. They work like cash or writing a check. 

With credit cards, charges can be paid over time, with interest applied after a grace period of a standard number of days, usually 20–30.²  Credit cards may also have an annual fee, while debit cards don’t. 

Using a credit card responsibly can help you demonstrate creditworthiness and build up your credit score. If you overspend or get behind on payments, though, your credit score may suffer. Debit cards don’t come with this credit connection; they’re credit neutral. 

Ready for a deeper dive? Explore your options at United.

Debit Cards   Credit Cards

 

¹ Certain restrictions apply. For details, visit mastercard.com/zeroliability and usa.visa.com/pay-with-visa/visa-chip-technology-consumers/zero-liability-policy.html.

² For purchases only, and the account must have a zero balance.