Answer:
Credit Cards vs. Debit Cards
Credit cards and debit cards typically look almost identical, with 16-digit card numbers, expiration dates, and magnetic strips, and EMV chips.1 Both can make it easy and convenient to make purchases in stores or online, with one key difference. Debit cards allow you to spend money by drawing on funds you have deposited at the bank. Credit cards allow you to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.
Explanation:
Pros of Using Credit Cards
Credit cards can offer certain advantages over debit cards, though they can also have some downsides. Here’s a closer look at the pros and cons of spending with credit cards.
- Build credit history
- Warranty and purchase protections
- Fraud protection
Cons of Using Credit Cards
The main drawbacks of using credit cards involve debt, credit score impacts, and cost.
- Spending can lead to debt
- Credit score impacts
- Interest and fees
Pros of Using Debit Cards
Debit cards can have both upsides and downsides, just like credit cards.
- Avoid debt
- Fraud protections
- No annual fee
Cons of Using Debit Cards
Similar to credit cards, the biggest downsides of using debit cards involve credit score impacts and cost.
- No rewards
- Won’t build credit
- Fees
