Credit Cards vs Debit Cards
While both offer an easy and convenient way to pay for purchases, there’s a big difference between Debit and Credit Cards. One works with the money you already have, whereas the other uses borrowed funds which you then pay back later. But which is which? And, more importantly, how do you pick the right Card for your spending needs?
When you spend on your Debit Card, you’re using your own money, which is taken automatically from your current account. This means you usually can’t spend more money than you already have.
A Credit Card, on the other hand, is completely separate from your current account. When you buy something with a Credit Card, you are essentially borrowing money to make the purchase and this amount will need to be paid back later. Your Credit Card issuer pays the vendor, then you repay the Card company.
This allows you to spend, even when you may not have the funds readily available. You can choose to pay off the full balance of your spending each month or repay it over time. You will be charged interest if you do not pay the balance in full each month. So, if you need to make a larger purchase, a Credit Card could be a more convenient option.
There are several differences between Credit Cards and Debit Cards you should know about. Let’s take a look at the key features of Credit Cards vs. Debit Cards:
Debit Cards:
Credit Cards:
Want to learn more about Credit Cards and how to use them right?
A Debit Card offers a straightforward way to spend with little to no risk of debt and often with no fees or monthly payments. Debit Cards work by taking money you already have in your current account. However, you may not reap some advantages enjoyed by Credit Cardholders.
When handled well, choosing a Credit Card from American Express can offer you:
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