Debit cards make managing your money convenient, quick, and easy, especially during this global pandemic. Instead of using cash or credit, you can just swipe your card, enter your PIN or sign depending on the merchant, and complete your purchase. Our last blog post covered what a debit card is and why you should use it.

Now let’s address how a debit card is different from a credit card and how to properly use it.

What’s the difference between a debit card and a credit card?

 
With Debit Cards:

• You use your own money in your checking account
• You’re offered a free card from us when you open a checking account
• You can never carry a balance so there is no interest that accrues on purchases
• You can use it at an ATM to take cash out of your account
• You neither hurt nor help your credit score when using your card since you can only access the funds in your account

With Credit Cards:

• When you buy something with a credit card, you are buying it with the line of credit that the credit card company has extended to you
  • You have the option each moth of paying back the entire bill, paying a portion, or making a minimum payment
• It is necessary to be approved by the issuer for the credit card
• If you don’t pay your bill in full, you will usually pay interest on the amount you owe (often referred to as a revolving balance)
• How you use of your credit card will affect your credit score; paying your bill in full each month helps build your credit score

Can I use my debit card to buy things online?

The short answer is yes. Just make sure you pay attention to the source you are making the purchase from. You want to know and trust it to protect your debit card information. If you think there is a chance you will return your purchase, it can take a while (up to 90 days) to get the money back in your account. With a credit card, the timeframe is typically 3-7 business days.

Will my debit card work if I don’t have any funds in my account?

More than likely, your card will be declined if you have insufficient funds. This is to prevent your account being overdrawn and then being charged an overdraft fee.

In order to prevent an overdraft fee, we offer our members overdraft protection. This means instead of having your card be declined or charged, it automatically withdraws the necessary funds from your savings accounts in order to cover the cost of your purchase.

When used correctly, the debit card is a quick, easy, and convenient way to access the money in your checking account. And for the bumps in the road, from overdraft protection to managing a lost or stolen card, Spectrum Credit Union is there to help.

For more information on the perks of a Spectrum Credit Union debit card, check out our member’s checking page. We also recommend reading the rest of our debit card series: Debit Card Series Part I: What It Is.