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Credits and Debits: The Pros and Cons of the Cards in Your Wallet

Both credit cards and debit cards have a role to play in your financial life. Knowing how and when to use each of them represents a step toward financial security. 

TCU Senior Vice President Dan Rousseve spoke with WSBT-TV in South Bend on what consumers should know about the differences between credit cards and debit cards: https://wsbt.com/news/local/financial-experts-talk-about-safety-when-using-debit-and-credit-cards

Both serve important and useful purposes, but understanding the differences between them can protect consumers from fraud and help them save money.

When using a debit card, spending does not affect your credit score, and funds for purchases are automatically withdrawn from your account, adding an immediacy and transparency to your expenses. Debit cards also make it easy to withdraw cash from an ATM and other vendors.

Credit cards tend to offer more security, especially for online shopping, with reduced liability for fraudulent purchases if your card is lost or stolen or your account is otherwise compromised. The Fair Credit Billing Act (FCBA) helps consumers secure refunds for fraudulent purchases and reimbursement for damaged goods. One potential downside is the gap between payment and billing, which could reduce awareness of spending, and interest on unpaid balances can add up.

Both credit cards and debit cards have a role to play in your financial life. Knowing how and when to use each of them represents a step toward financial security.