How to Choose Between a Credit or Debit Card

It can be confusing to know the difference between a credit and debit card. Are they the same? Do you need both? Which one is better for you? Texas First Bank is here to help answer these questions and provide guidance on how to choose the right card for your needs.

What Is a Credit Card?

A credit card is a type of loan that enables you to borrow money from a lender, such as Texas First Bank, and then repay it over time with interest. When you make purchases with your credit card, you are borrowing money from the bank. That borrowed amount is added to your balance and must be repaid with interest in order to avoid incurring late fees or other penalties. In addition, certain cards offer rewards for using them, such as cashback or points that can be redeemed for travel or merchandise. A major benefit of using a credit card is that it can help you build your credit score if used responsibly. 

What Is a Debit Card?

A debit card is linked directly to your checking account. When you use your debit card to make purchases, the money comes directly out of your account balance. This means that if there isn’t enough money in your account at the time of purchase, then it may be declined or overdraft fees may be assessed when the purchase goes through. Debit cards do not typically offer rewards like credit cards; however, some banks may offer reward programs for using their debit cards frequently or making certain purchases. 

Also unlike credit cards, debit cards do not help build your credit score since they’re not reported to any of the three major U.S. bureaus (Experian, TransUnion, Equifax). In addition, many stores require that customers have a minimum purchase amount in order to use their debit card—typically $10 or more—which can be inconvenient when buying smaller items like groceries or household goods.  

At Texas First Bank we understand how important it is to know which type of payment option best suits your individual needs and lifestyle. Whether you choose a credit or debit card (or both!), we want all our customers to feel empowered when making purchasing decisions so they can save more while still living life according to their budgeting goals! If you have any questions about choosing between a credit or debit card please don’t hesitate to reach out—we’re here for our customers every step of the way!