5 Advantages of Using a Debit Card vs. Credit Card

Debit cards might be a smarter choice for you based on your personal needs and financial situation.

3 min read

Paying with plastic is quick and easy, whether you’re making purchases with a debit or credit card. But even though debit and credit cards look almost identical, there are big differences between them.

When you pay for something with a debit card, the payment amount is deducted directly from your checking account. You’re making the purchase using money that you already have. With a credit card, you are charging the amount to a line of credit. You are borrowing money to make the purchase and agreeing to repay it at a later date. Is it worth taking out a line of credit for your weekly latte order? Not necessarily, and this is one of the reasons why debit cards are perfect for your everyday purchases.

Is a debit card better than a credit card? Depends. Debit cards might be a smarter choice for you, based on your personal needs and financial situation. While there are benefits to both types of cards, it’s better to use a debit card if these situations apply to you:

1. You want to manage your spending

It’s all too easy to overspend when you have a credit card, and your purchases can quickly get out of hand. With a debit card, you won’t be tempted to buy things that you can’t afford. Debit cards are ideal when you’re trying to keep track of your spending. With the N26 app, you can even set spending limits to help you better manage your money and use spending statistics to keep track of how much you spend in different categories.

2. You want to avoid debt

If avoiding debt is a focus for you, you’ll want to stick to using a debit card. With N26, you can even , and transfer money in or out of your main account instantly for larger purchases with just a few taps. Start saving for bigger purchases, and you’ll avoid getting into credit card debt.

3. You don’t like paying fees

Debit cards often have fewer fees than credit cards. Credit cards can charge an annual fee just for the privilege of using them. You may also encounter late payment fees, over-limit fees, expedited payment fees, cash advance fees, balance transfer fees, returned payment fees, and card replacement fees (not to mention steep monthly interest charges). That’s a lot of fees to keep up with — and to pay. . No minimum balance, no maintenance charges, and no foreign transaction fees when you pay with your N26 card overseas. .

4. You want access to cash without paying fees or interest

There are situations that require having cash, even if paper money and checks are a thing of the past. Keep in mind that with a credit card, you’d probably have to pay steep fees to use an ATM. With N26, you also have that provides you with unlimited free ATM withdrawals at over 55,000 locations across the U.S. and more.

5. You don’t want to jump through hoops

You won’t have to fill out a long application or meet a minimum credit score to get a debit card. All you need is a checking account, and money to use it. To apply for a credit card, you might have to complete numerous processes and forms, and even wait for a response. You can .

Learn more about the advantages of using an N26 debit card and discover mobile banking the world loves. .

The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.

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