We have two kinds of cards in our daily use, no matter who is the issuer. One kind is the credit card; the other kind is the Debit/ATM card. They are used differently.

 

            A credit card is used to borrow money. It begins with a zero balance. After you borrow the money, the balance goes negative. You need to pay it off and make the balance return to zero. Every credit card has a credit limit. That limit is the maximum amount of money that you can borrow cumulatively during a month. After you borrow the money from your credit card, you need to pay off your bill at the end of that month to get rid of any extra charge. If you do not pay it off on time, you will be charged both a late payment fee and interest on the amount of money you have borrowed 

 

            You never can borrow money from a Debit/ATM card. It means you can only spend the money you have. If the balance goes negative, you will be charged an over-draft fee. You can withdraw cash from either your savings account or checking account on an ATM since you have a choice at the machine. Most ATMs charge a fee to take money unless the machine belongs to your financial institution. The savings account is for you to earn interest by keeping money in it, while when you charge something with the debit card it comes from your checking account. Here is a hint for you when you use your debit card in a grocery store. Always choose credit instead of debit, because you might be charged a fee to choose debit option.

 

            Either kind of card has its own benefit. The credit card can help you build your credit as long as you pay off your bill on time after each time you borrow money from it. The debit card can help you control your expenditures and prevent you from spending more money than you can afford.