How a debit card works

With a debit card, you are using the money in your bank account and what you can spend is also limited to what you have in your account. For example, if you have $1,000 in your bank account, you can only spend up to $1,000.

How a credit card works

With a credit card, you can spend any amount up to your credit limit and you pay back what you’ve spent every month. When you get approved for a credit card, you get a credit line based on your financial health. This is the maximum amount you can spend on your credit card every month. When you don’t pay back the full amount of your spending on time, you will pay an interest charge.

When to use a debit card

1. When you don’t want to spend more than what you have

  • Since you can’t spend more than what’s in your bank account, it could be a good way to hold you accountable for your spending.

2. When you don’t want to pay fees

  • Debit cards do not have any fees such as annual fees or foreign transaction fees.

When to use a credit card

1. When you want to build credit history

  • Using a credit card means borrowing from the bank and paying back which helps you build credit history much more quickly. Better credit history will let you access many more financial services, so getting a credit card is one of the first steps in managing and planning your finances!

2. When you want to earn rewards on things you spend your money on

  • Many credit cards provide rewards on your spending. Using one can save you a lot of money.
  • You can find credit cards that suit your needs easily with our credit card questionnaire.