Credit cards vs. debit cards.

Which one should you use?

You’re finishing up your grocery shopping, and it’s time to pay. Once you scan all your items at the self-checkout and get out your wallet, do you pull out your credit card or debit card?

There’s no clear answer, and each card has its benefits. But, we’ve gathered some helpful information so you can decide which card you might want to reach for.

Using your debit card is like using an ABM.

Your debit card is directly linked to your chequing or savings account, and when you use it to make a purchase the funds are immediately taken from that account. That means, you can generally only spend money you actually have. Think of using a debit card like spending cash, only you’re skipping the middle step of withdrawing it from an ABM.

This can help you control spending, but may not do much good for unexpected emergency expenses that you aren’t immediately able to cover. Your bank account might have overdraft protection, which can allow you to make debit card purchases even with insufficient funds in your account. But be aware you may be charged a fee if your balance dips into the negative.

Credit cards can help you build your credit score.

When you use your credit card to make a purchase, you’re borrowing money on the spot with a promise that you’ll pay it back later. This can be helpful for necessary big-ticket purchases or emergency expenses you weren’t expecting.

When used responsibly, credit cards can also help you build your credit history. And did you know that a good credit score can make it easier to get approved for loans in the future, like a mortgage for a new home or a lease on a new car?

Credit cards can include benefits you may not find on your debit card.

Many credit cards also come with benefits such as extended warranties on items you’ve purchased, car rental insurance and other perks you don’t see as often with debit cards. Double check the insurance certificate that comes with your credit card to see what coverage is included.

Find out which of our credit cards you’ll be approved for before you apply¹ , with no impact to your credit score. Try Quick Check^®.

Learn more about how Capital One can help you on your financial journey.

 ¹ Conditions and limitations apply.