Debit cards give easy recordkeeping and are accepted at many merchants and make your purchasing more convenient. Unlike a credit card, the money comes out of your checking account. This is a great way to avoid spending more money than you actually have. Before you use your debit card, make sure you check your checking account balance. If you spend more than what you have, your purchase could be declined or the bank could charge you an extra fee (overdraft fee).

A credit card is a payment card that is issued to users as a system of payment. Credit cards allow the cardholder to pay for goods and services based on the holder’s promise to pay for them. The issuer of the credit card creates a revolving account and grants a line of credit to the consumer/ user from which the user can borrow money for payment to a merchant or as a cash advance to the user.

Credit cards allow the consumers a continuing balance of debt, subject to interest being charged to the user. A credit card can be used like currency by the owner of the card and typically involves a third-part entity that pays the seller and is reimbursed by the buyer. The size of most credit cards 3 3/8 in x 2 1/8 in and have an embossed bank card number complying with the ISO/IEC 7812 numbering standard.

The concept of using a card for purchases was first described in 1887 by Edward Bellamy in his utopian novel titled “Looking Backward”. In the book, Bellamy used the term credit card 11 times. In 1928, the Charga-Plate was developed as an early predecessor to the credit card and was used in the US from 1930s-1950s. Today there are different types of credit cards available for users to use.

There are 4 most common types of credit cards that include:

1. Zero-or-low interest rate (best for people willing and able to pay down existing credit card debt relatively quickly- pros: most of the cards offer the bargain rate on balance transfers from other cards and the lower rate can save you money on your current interest costs; cons: the low rate usually lasts for only 6-9 months, then reverts to something higher (around 14-16%) and one late payment will mean the card will revert to the higher rate immediately and if you transfer a large balance, but don’t pay it off during the favorable rate period you can end up with a higher rate than you started off with.)

2. Secured (best for people that has gotten into trouble with credit cards in the past- pros: most secured cards report to three credit bureaus, so using one responsibly can be a way to establish or even repair your credit rating; cons: the secured part means that you have to put down a deposit, usually between $200-$250 with your application and many secured cards have high interest rates and annual fees).

3. Rewards (best for people that make the majority of their purchases on a credit card and pay off the balance every month- pros: reward cards offer cash back, airline miles, or points toward purchasing select merchandise based on the amount that you spend and some reward cards currently offer as much as 5% cash back on select purchases with no annual fee; cons: some reward cards have high interest rates and annual fees that can cancel out the reward benefits and other have complicated and unfavorable redemption policies).

4. Student (best for college students that can handle money responsibly- pros: students can qualify for these cards without having an established credit rating and many offer extra benefits such as cash back or bookstore discounts for students; cons: some companies can charge higher interest rates for students and it’s easy for students who are inexperienced with handling credit cards and finances to rack up unmanageable debts quickly).