Most people own at least one debit card and at least one credit card. Although it may not seem like it, there are many differences between the two. Each time you use a credit card, you’re borrowing money. You’ll need to pay that money back to the credit union along with interest. Need a credit card? Check out our low-interest, no-annual-fee options.
A debit card, on the other hand, simply transfers your own money from your checking account to the vendor you’re paying. The funds are taken directly from your account in a similar manner as using checks — only quicker. Some processing terminals will require a PIN and some will require a signature. Need a debit card? Open a checking account.

Both credit and debit cards are convenient, quick and easy. They’re also safer than cash, because cash cannot be replaced if lost or stolen. Which one should you use? The answer depends largely upon your lifestyle.

1. Budgeting

Credit cards allow you to buy now and pay later. This can quickly turn into a budgeting nightmare. If you think you’ll be tempted to overspend, regular credit card use may not be ideal for you.

However, it’s nearly impossible to incur thousands of dollars of debt through debit card usage. Most credit unions will cover purchases that put your account into the red, but only up to a few hundred dollars. If this happens, you’re accountable for your purchases and charged an overdraft fee. Check out the overdraft options at Scenic Community Credit Union.

2. Safety

Most times, if you report suspicious charges within 60 days, credit card companies are obligated to investigate and restore the funds if the charges are fraudulent. Some credit card companies offer consumer protection on purchases (read the fine print when you're shopping for a card to be sure what you're getting). This makes credit cards the ideal choice for large or fragile purchases that will be delivered to your home for additional insurance on the purchase.

Also, if you are the victim of a scam or phishing attempt where your credit card information gets stolen, you can have the card cancelled and be issued a new one. The money in your accounts will be inaccessible in that case. If scammers get ahold of your debit card information, however, they could potentially use it to clean out your checking account. Your money is more protected when you use a credit card, especially online. If you think your SCCU information may have been compromised, get in touch.

3. Rewards

One major draw for credit cards is the points awarded for purchases. That’s a strong advantage over debit cards. The ability to earn airline miles and other discounts is attractive to many consumers. Of course, you may be paying for those miles with a high interest rate or an annual fee.

Don’t get hooked on the points. Research each card carefully to make sure you’re really getting your money’s worth. SCCU does not offer a rewards card, which is part of the reason we are able to offer competitively low rates.

4. Credit History

Credit cards help establish or restore good credit. Occasionally using a credit card and paying your bill on time can really improve your credit rating. This, in turn, improves the likelihood of earning favorable terms for home loans, auto loans, personal loans and more. Need help building your credit or getting it back in shape? Get in touch with a certified financial counselor.

5. Annual Fees and Interest

Credit card annual fees and interest add up. If you’ve overspent one month and are unable to cover the entire amount due, you may need to pay only the minimum payment. More of your payment goes toward interest than toward lowering your bill. This makes the next payment higher. If you don’t think you will be able to pay your bills in a timely manner, keep credit card usage to a minimum.

As a Scenic Community Credit Union member, you already have access to fantastic rates and optimal security. To find out which debit or credit card is best for you, call, click or stop by today!