Debit Card vs. Credit Card – what’s the difference?
When you open a checking account many times you will also receive a debit card. Just like a paper check, this card is linked directly to your checking account. Any transactions you make will be deducted from the balance you have in your account. If you were to charge more than what is available in your checking account, you will either be declined for the purchase or be assessed an overdraft fee to your account. Depending on your account terms, this fee could be assessed daily and per transaction*.
Any purchase you make with a credit card is considered a loan. The merchant receives the funds immediately, but you have to pay the credit card company back for that purchase. These transactions are charged interest every month until they are paid back. Your credit card also comes with a line of credit and you cannot charge more than the line of credit limit.
*East River Federal Credit Union does not charge a daily fee and has overdraft protection available for all checking accounts. The overdraft protection product works like a loan, so there is no fee assessed, just the interest on the transaction.
Common questions we receive about debit cards and credit cards:
When I use my debit card, I chose “credit” instead of “debit” at the terminal. Doesn’t that make it a credit card purchase?
No. When you are choosing credit, you are simply opting not to enter your PIN number for your debit card.
Is it safer to use my debit card or credit card when I travel?
It is safer to use your credit card when traveling. If you find a charge that you didn’t make, you’ll likely receive an immediate credit of the disputed funds and the credit card company will handle the investigation. When the dispute process goes through your checking account, you will receive a credit to your account, however you will most likely have to take additional steps to dispute the charge on your own behalf.
Why would I want to have a credit card?
Many people are nervous about getting a credit card because they don’t want to risk charging too much and going in debt. A credit card is actually a great way to build credit – as long as you are responsible with your purchases and don’t charge more than you can pay off. It’s good to have a little bit of a balance on your credit card and keep up with your payments. This will help increase your credit score because it shows that you are a financially responsible individual.
Can I get cash with a credit card?
Yes, but this is considered a cash advance and often times comes with higher interest on the transaction as well as a fee. Refer to the terms of your credit card for specific details.
What are the daily transaction limits on my East River FCU debit card?
Daily debit card transaction limits are $3,000 and daily ATM withdrawal limits are $500.
For more information, or to schedule a free financial review, talk with one of our Member Service Representatives.