Debit Card vs. Credit Card

Published: Mar 23, 2016 10:33:00 AM

Confused about debit cards vs. credit cards? The Bank of Tioga is here to answer all of your questions


Can you give a brief explanation of a credit card?
A credit card is an extension of credit used to purchase goods and services. The borrower can either pay the amount back in full each month or choose to make a minimum payment. If an amount less than the full amount owed is paid, interest is charged on the outstanding balance. This interest rate varies based on the credit card company.

Can you give a brief explanation of a debit card? 

A debit card is attached to a checking account and when it is used, money is deducted directly from that checking account and reflected in your available balance. There are daily usage limits on debit cards and these limits vary depending on the bank. 

What does it mean when I pay for something and it asks me “debit or credit?”
Most retailers offer two options when swiping your debit card, debit or credit. The money still comes directly out of your account no matter which option you choose. If you choose debit, you will be prompted to enter your four digit PIN (Personal Identification Number). If you choose credit, you will be prompted to sign for the purchase. 

Which one should I use to make payments online?
Either card can be used when shopping online. Visa and MasterCard offer Zero Liability Protection which means you will not be held responsible for unauthorized transactions on your card. Clients can establish an extra layer of security by signing up for Verified by Visa or MasterCard SecureCode. Some retailers participate in this extra layer of security that prevents fraudulent purchases when you checkout online. If the retailer participates, you will be prompted during the checkout process to enter your Verified by Visa or MasterCard SecureCode password. The Bank of Tioga issues MasterCard debit cards so to get you started, we have included a link to SecureCode Activation on our website under Client Services. 

Is one card type better than the other? 

One card type is not better than the other but they can provide different benefits. Utilizing a credit card in a responsible manner can help build your credit history. Debit cards allow you to only spend what you have available in your checking account. This may be beneficial for clients who choose to closely budget their money each month. 

Do I need both?
People do not need both types of cards, however it is usually a good idea to carry more than one card, especially when traveling away from home. Having multiple forms of payment (a credit and debit card in addition to cash or checks in certain situations) insulates you from the risk of not being able to complete a purchase because a merchant does not accept a particular form of payment or one of your cards is not functioning correctly for any number of reasons. Credit cards may be beneficial to use for purchases such as car rentals, hotel reservations, or large purchases. Debit cards may be beneficial for everyday purchases such as grocery shopping, gas, or restaurants.


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