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Credit Cards

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Debit Cards Credit cards and debit cards both have their own advantages and disadvantages. This guide will run you through some of the most important pros and cons associated with each type of card.


Credit Cards Pros •

When spending between £100 and £30,000 on a credit card payment protection applies.

Taking advantage of balance transfer offers can help credit card users pay less interest.

Reward schemes can give credit card users added benefits such as free gifts/services or even cashback.

Cons •

Users are normally charged interest on their purchases.

Debts can mount up if credit cards are not used responsibly.

Differences between the interest rates charged for spending on the cards, balance transfers and withdrawing cash can make things more confusing.


Debit Cards Pros •

Debit card users are not charged interest on their purchases (unless they are using an overdraft).

Debit cards are easier to get than credit cards; most UK current accounts automatically issue a debit card.

You are spending money you have in your account, so you can’t run up large debts unless you have a large overdraft.

Cons •

It is possible to go overdrawn. This can lead to bank charges and the need to pay interest.

You normally don’t have instant access to credit, and credit can be very useful in emergencies.

In some situations a debit card may not be accepted when a credit card would e.g. if you want to rent a car or book a hotel room.


Important Information If you are experiencing debt problems it may help to seek advice from these organisations: • Debt Advice Foundation • National Debtline

*The information provided in this document should not be considered financial or investment advice. The information contained herein should not be used for financial decision making.


Credit Cards vs Debit Cards