News & Tips

You may remember the first time you heard the question “credit or debit?” After all, both cards have a 16-digit number, a CVV, and an expiration date. Rather than pay with cash or check, debit cards and credit cards are convenient ways to purchase goods and services—the difference comes down to paying now or later. We’ll go over the advantages and disadvantages of debit cards vs. credit cards. Plus, we’ll answer when’s the best time to use each card.

What is the difference between a debit and credit card?

With a debit card, you’re paying “now.” With a credit card, you’re paying “later”—if you pay the entire balance by a certain date, you’ll avoid accruing interest. Other differences between the two card types include credit-building abilities, fraud protections, and fees. 

What are the similarities between credit and debit cards?

Anywhere that accepts a credit card will most likely accept a debit card. Both cards often come with chips and contactless payment methods, such as a card tap or using digital wallet. Both cards also require a certain degree of responsible usage to get the most out of their benefits. 

What is a debit card?

When you open a checking account, you’ll receive a debit card, which will require you to set up a personal identification number (PIN). Every time you pay with a debit card, you’re deducting funds from your checking account in real-time (with a 24-hour holding period, longer for holidays and weekends). 

If you’re under 18, specifically 13-17 years old, consider opening a SCCU Student Checking Account with a parent/guardian—a great way to learn the ropes of money management. See all of our Checking Accounts and Savings Accounts. 

Advantages of Debit Cards

Debit cards, especially at Space Coast Credit Union (SCCU), offer a plethora of benefits. Let’s take a look at the top advantages of debit cards:

• Round-up Savings: Did you know you can open a round-up savings account at SCCU? Every time you use your SCCU debit card, we’ll round up your transaction to the nearest dollar, and we’ll deposit that change into your SCCU Savings Cents—while earning a high interest rate. You’ll quickly see your savings add up! 
• Cash Access: A debit card in your wallet eliminates the need to carry around cash all the time. But, if you need it, you have options:
  • ATMs: Withdraw cash at thousands of fee-free ATMs nationwide with an SCCU checking or savings account. 
  • In-store cash: While making a purchase in stores at a card terminal, you’ll usually have the option to request to withdraw some money.
• Budgeting: With a debit card, you’ll need to be conscientious of your usage to ensure you have enough funds in your checking account to cover the cost of the purchase. This makes it more doable to track your purchases and stay within the boundaries of your budget.
• No interest: One of the biggest advantages of a debit card that, unlike a credit card, it doesn’t come with the burden of accumulating interest since you’re paying your balance in real-time.

Debit Card Disadvantages

It’s important to keep in mind the following when choosing to use your debit card or not: 

• Fees: Unfortunately, with many financial institutions, you’ll face overdraft or non-sufficient fees if you don’t have enough money in your checking account. Be sure that your bank or credit union offers automatic overdraft transfers at no charge. Out-of-network ATMs also typically charge fees, but you can use an SCCU Visa^®Debit Card at over 20,000 fee-free Allpoint ATMs nationwide. 
  • With a totally Free Checking Account, you’ll save an average of $86 a year on fees, and you can get your direct deposit up to two days early! 
• Not credit building: Generally, you can’t build credit by using your debit card. If you need to improve your credit, an SCCU Visa^® Secured credit card can help.
• No rewards: While debit cards offer many features and benefits, they don’t usually come with the bells and whistles of credit cards with rewards programs or discounts. The reward is the peace of mind that you’ve paid for the purchase now and won’t have to pay it back later. 
• Fewer fraud protections: If a scammer gets a hold of your debit card information, they may have a direct line to your funds in your checking account. In most cases, you are liable for a certain amount of money depending on how soon you notify the financial institution. That’s why it’s crucial to set account alerts to track account activity.

What is a credit card?

With a credit card, you’re borrowing funds from a financial institution—which expects you to pay back the amount later. But no, the sky isn’t the limit if you’re thinking of going on a shopping spree! You’ll have a credit line, which is the maximum amount you can borrow during a specific timeframe. Usually, the better your creditworthiness, the higher your credit line. You’ll need to be 18 years old or older to get your own credit card. 

Advantages of Credit Cards

Here are the top advantages of using your credit card: 

• Rewards programs: Whether it’s cash back or points, earning rewards with credit card purchases make usage worth it. Learn more about the differences between Visa^® Platinum and Visa^® Signature rewards programs here. 
• Travel benefits: Some credit cards offer travel benefits, such as roadside assistance, rental car insurance, free checked bags, hotel upgrades, etc. Some rental car companies and hotels will require that they have your credit card on file.  
• Credit building: If you’re just starting out in life, responsible credit card usage will help you get on the fast-track to building your credit. If you’re under 18, you may be able to become an authorized user on a credit card account to start building credit early. Learn more about ways to build your credit here. Keep in mind that using more than 30% of your credit line and not making payments on time can hurt your credit score.
• Emergencies: Unfortunately, with life, many unexpected events may happen with accidents, illnesses, job loss, etc. Credit cards can help you foot the bill for many of these emergencies, giving you time to make payments later.  
• Fraud protections: With credit cards, you’ll typically have more time to notice suspicious activity on your statements before the bank withdraws money from your account. You’re also only liable up to $50 with credit cards thanks to the Fair Credit Billing Act. SCCU credit cards have Visa^® Zero Liability Protection¹⁴ and ID Navigator powered by NortonLifeLock⁴⁶. 

Learn more about choosing the best credit card to fit your needs and the answer to how many credit cards you should have.

Disadvantages of Credit Cards

Let’s take a look at the disadvantages of credit cards: 

• Interest: As long as you pay off your balance entirely every month, you won’t have to worry about accruing interest with your credit card; however, if you carry over a balance, the interest charges quickly add up. Pro tip: Set up ACH payments (automatic payments from your checking account) with your credit cards so that you’ll always have on-time payments.   
• Fees: Main credit cards will issue balance transfer fees, cash advance fees, or annual fees. At SCCU, our credit cards don’t have these fees! 

How to Identify a Credit Card vs. a Debit Card

Not sure if you’re looking at a credit or debit card? They really do look a lot alike. First, check to see if the word “Debit” is on the card, typically on the front. If you see it, then it’s a debit card. Piece of cake!

Is it better to use a debit or credit card?

Debit cards come in handy for everyday small purchases, such as coffee or lunches. They can also be useful in convenience stores and “mom and pop” shops to avoid certain types of fees that you would have to pay if you were to use a credit card, helping you save a few bucks here and there. They also help many people stay accountable with their budgets. 

With many credit cards, you can earn points or cash back when making purchases at certain places, such as restaurants, gas stations, or grocery stores. Plus, with their fraud protections, it’s wise to use them for online purchases. Remember that while it may be possible to finance purchases with credit cards, a home equity loan or a personal loan may offer a lower interest rate. 

Final Answer: The best time to use a debit or credit card often depends on the location of the purchase, whether you’d like to pay now or later, and the benefits you’re looking to get.

SCCU Has Your Back with Credit and Debit Cards

As a credit union, we’re not out to get our members with hidden fees or gotcha terms. We also offer several fraud protection features for debit and credit cards, loans, and accounts because we are our Members’ Watchdog, always protecting their financial interests. If you live or work in these counties in Florida, you can become a member with a $5 deposit in a Share Savings Account.