credit and debit cards

The Difference Between Credit and Debit Cards

The cards in your wallet may look the same, but there actually are some major differences between credit and debit cards. Understanding the difference between these two payment methods can help you avoid financial issues and even earn some extra money in the process.


A debit card or check card is, essentially, a digital checkbook. It is tied directly to your financial account. When you make a purchase, it is subtracted from the amount you have. Most banks and credit unions will give you a debit card to access the funds in your checking or savings account. You can also purchase prepaid debit cards with a specified amount that you can reload, as needed.

Credit cards allow you to borrow money from the card issuer, which means that your application for a card must be approved by the financial institution. If you have bad credit or no credit, you might not be able to get a credit card, or your interest rate could be higher. Credit cards also influence your credit score — for better or for worse.


Most debit cards require a PIN to make a purchase. This is a special code that authorizes the merchant to deduct money from your account. Normally, the only fees you have to worry about with a check card are overdraft fees — which occur when you try to spend more than you have. America First offers a free line of credit with our checking accounts to help you avoid costly overdraft fees.

Larger purchases with a credit card require a signature. And since a credit card is a loan, you will sometimes have to pay annual fees, over-limit fees or late-payment fees. However, credit cards also come with perks such as cash back, discounts and travel points. In fact, because of those types of reward programs, if you use your credit card wisely and pay the required balance each month, you can actually profit from your purchases.


A debit card offers less temptation to spend more than you have because it’s linked to your bank account. However, this also means that if if your card is stolen and your PIN is compromised, someone could have direct access to the funds in your account. It is important to report lost or stolen credit and debit cards as soon as possible.

If you are responsible in your spending and pay off your balance regularly, a credit card is, essentially, an interest-free loan. Many credit cards offer extended warranties on purchases made with the card. You can also get automatic rental car insurance and life insurance when you use your credit card while traveling.

America First offers zero-liability protection against fraudulent purchases on both our credit and debit cards. We will alert you if we see any suspicious activity on your account and work with you to get problems resolved as quickly as possible. We also offer protective services such as Card Guard® and free identity theft recovery to help you take control and make sure that you feel safe and secure no matter which type of card you’re using.