It is important to understand what a Debit card is and how it differs from a Credit Card.
In a nutshell…
- Debit cards are like Checks and pull money directly from your checking account. It may take a few days for the money to be taken out of your checking account. You cannot use a debit card if your checking account does not have enough money in it.
- Using debit cards prevents you from spending money you don’t have and prevents you from paying the very high interest rates on credit cards.
- Credit cards are like a short term loan. When you pay with a credit card, the card issuer (e.g. your bank) is actually paying your bill, and loaning you the money. Every month you get a “bill” (your Credit Card Statement) from the card issuer on what you owe them. See “Decide if You Need a Credit Card” below for more information.
Some good overviews of the differences between credit and debit cards: