Ins and outs of debit cards
A debit card is a direct line to your bank account. It’s important to remember that fraudsters and scammers are out there, and they can sometimes get ahold of your personal information. If someone steals money from your bank account by getting your debit card details, you may be protected under the Electronic Funds Transfer Act (EFTA), but that comes with some stipulations. It can also take a little while to get your money back, and you may still carry some liability if you don’t report your card lost or stolen right away. That’s why protecting your personal information is so important.
If you want to withdraw cash, a debit card is the way to go. With your debit card, you can withdraw from an ATM or get cash back from a grocery store for those times when you need a few bills in your pocket. And if you aren’t sure you’ll be able to spend responsibly with a credit card just yet, a debit card can let you make many of the purchases you would make with a credit card.
Who a debit card is right for:
- Anyone with a checking account
- Someone who likes to get cash back at the grocery store
- People just getting started financially and don’t have an established credit score
- People who prefer not to use credit
How credit cards can work for you
For transactions where the merchant places a hold on funds—like an authorization for a damage deposit during a hotel stay—you don’t have to worry about your money being tied up before the authorization is released. Some credit card issuers will allow borrowers to take out a cash advance, but this often comes with fees and higher interest rates than normal purchases.
If you’re hoping to build your credit for a future home or car purchase, a credit card can be a good starting point. If you don’t already have a credit card, applying for one and then paying your bill on time each month can be a way to boost your score.
Some of the biggest benefits of credit come from security and earnings. With credit, your cash is one step removed from fraudulent purchases, adding an extra layer of protection compared to a debit card. If someone steals money with your debit card, they’re stealing from you, and you may have to fight to get your money back. But if they make fraudulent transactions with a credit card, they’re technically stealing from the credit card issuer, so your cash is one step removed.
And with a card like the Visa Platinum Rewards card from RMCU, each dollar you spend racks up points that you can redeem for travel, gift cards, or cash back. So with your everyday spending, your dollars do more for you.
Who should use a credit card:
- People who want to maximize rewards and points
- Those looking for an extra layer of protection for their money
- People who can make on-time payments each month
- People who want to build their credit
If you’re not sure whether you’d rather have the easy access to your bank account you get with a debit card or the extra protection and points that come with credit, there’s good news. You don’t have to choose! Having both a credit card and a debit card in your wallet can give you extra financial flexibility while enjoying the benefits of both.
No matter where you are in your financial life, RMCU has you covered. Apply to become a member,* and find the security and service you want for your finances, whether that’s credit, debit, or both.
*Must qualify for membership. On approved credit. Some restrictions may apply. Each account is privately insured up to $250,000 by American Share Insurance. By member’s choice, this institution is not federally insured.
Non RMCU links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Rocky Mountain Credit Union of any of the products, services or opinions of the corporation or organization or individual. RMCU bears no responsibility for the accuracy, legality, or content of the external sites.
