Good Neighbors Credit Union

The Basics of Home Equity

Home equity is a term people mention when talking about a house or loan. It is also frequently mentioned when talking about selling a house

Credit Card VS Debit Card: How Do They Differ?

Cash VS card? The answer is card for sure. According to Fundera, 80% of people prefer cards over cash. Of the 80% users, 26% of people prefer spending using a credit card while 54% use debit cards for the purpose. In this digital age, cash has become almost redundant. So, the real question is whether you should opt for a credit card or a debit card for your spending?

If you want to get an answer, read this blog till the end, as we will weigh both options so that you can decide which one is right for you.

What is a Credit Card?

A card issued by a bank or a credit union through which you can get loans and spend them as you wish. You will have to pay the loan back with interest at the end of the month.

Generally, there are four types of credit cards: standard, secured credit, reward, and charge cards.

Using a standard credit card, you can transfer money and shop for goods.

On the other hand, for using a secured credit card, you need to first make a deposit to the issuer, which will be the collateral, and then you can use it.

Moreover, a reward card enables you to win travel points, monetary prizes, etc., depending on your expenditure.

Meanwhile, with a charge credit card, you don’t have an upper limit for spending, but you have to pay all your unpaid balances to use it every month, so be mindful of it.

There are both pros and cons of using a credit card for your routine purchases. In this section, we will have a look at the advantages and disadvantages of using credit cards.


Here are the pros of using a credit card.

  • Under certain conditions, you can reap benefits such as plane tickets, cash prizes, etc.
  • It offers more flexibility for pricey purchases
  • Users can have positive credit scores if the debt is paid off on-time
  • Buyers may get an additional warranty for items purchased with a credit card
  • Interest starts building on 30 days after purchase


However, when there are advantages, there are disadvantages as well. Here are the cons of using credit cards:

  • The negative credit report impacts your future expenditures
  • The user has to pay off the bill at the end of each month
  • If not paid on time, the user can get into hefty credit card debt

What is a Debit Card?

A debit card draws from the money you have deposited in your bank or your credit union account. There are two basic types of debit cards, standard and prepaid debit cards.

A standard debit card draws from the money you have deposited in your bank or credit union account.

Meanwhile, a prepaid debit card allows you to make digital purchases only, till there is money in the account.

Similar to credit cards, using debit cards also have pros and cons.


  • It keeps the spending controlled as it spends money from the deposited amount in the bank or credit union account
  • There is no monthly fee for using most debit cards
  • There is no interest on the spending
  • You cannot accumulate a debt that may hinder you in the future


  • Debit cards do not have a reward system despite the significant expenditure rate
  • You can use the card in another bank or credit union machine, but you will be charged for it
  • You cannot gain a positive credit score by using it


Each card has its pros and cons, and we can’t say that one is better than the other. It is all a matter of preference of the individual. However, if somebody has both cards, then they can reap the benefits of each.

If you want advice on which card is better for you, contact our specialized team at Good Neighbors Credit Union, and we will happily guide you through your financial decisions. Being a trusted credit union, our aim remains to assist our customers regarding their financial doubts and decisions so that they can achieve maximum benefits for years to come! Contact us now to learn more.

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