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The Resource Center Credit Fraud & Credit Monitoring | article

Credit and Debit: What Is the Difference?

Most adults have a debit and credit card in their wallet, and while both are fine options when it comes to helping you make a purchase, each has its pros and cons. Here is a brief rundown of the benefits of each and the safeguards in place for both to protect you against theft of identity.

With debit, money is taken right out of account as if you were using cash. This is great for keeping track of what was spent and how much real cash is in your account via online banking. If you need real money, you can use your debit card to easily attain it, whether you go to your bank’s ATM or even ask for cash back at the register.

As far as security is concerned, your PIN number helps protect you so a thief can’t use your card at an ATM or when you pay using the debit option. Also, there is no interest on your debit card like there is with credit. So all in all, a debit card is a convenient, relatively secure and interest-free option.

As far as the drawbacks of a debit card, it can be declined very easily if you have insufficient funds. Some banks allow overdraft, but they come with major fees in most cases. Also, most banks only allow roughly 30 days to challenge any purchases that could be related to ID theft.

Credit can come in handy in emergency situations when you are short on cash. And if you pay on time, stay within limit and pay more than your minimum, you are able to build your credit, which will lead to better interest and larger lines of credit. And while you’ll likely have to pay late fees if you aren’t timely on your monthly payments – incurring larger APIs and usually lower credit scores – you generally have more time to contest fraudulent purchases.

By enrolling in a credit monitoring service, you can be alerted to activity that could be the work of identity thieves as soon as possible, so that you can take the appropriate steps to clear up your good name and restore your score back to an appropriate level.