What Is the Distinction Between a Debit Card and a Credit Card?

Although both debit and credit cards are common financial tools used to make purchases, the differences between them and the potential impact to your finances may not be as clear.

Debit Cards

Debit cards allow you to pay for purchases with money directly from your bank account.

In the old days (like 15 years ago), people would write a check and then track that expenditure in their checkbook so they knew how much money was left in the account

Now, you can use your debit card and the money is similarly deducted in a few days, although you’ll likely see a pending transaction notice for your purchases.

Credit Cards

Credit cards allow you to make purchases with money that you may or may not have.

Another way to think about it is that you are racking up small loans throughout the month with each purchase.

When you use borrowed money, it’s easier to make purchases you shouldn’t make because you don’t actually have to pay any of your money right then.

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