FAQs
Debit cards don’t rely on your credit score or credit history for approval because there is very little risk of the issuer not getting paid. While banks don’t require a credit check, they do require you to link a checking account to your debit card so your transactions automatically pull from your available cash balance. Depending on your bank, there may be a minimum balance you need to maintain in your checking account.
Whether you opt for a debit card or credit card will depend on your financial goals and risk appetite. Debit cards don’t hurt your credit, run up interest charges or late fees, and can’t get you into debt — though you could incur overdraft fees if you spend more than is available in your checking account. While credit cards have these risks associated with them, they also offer more freedom for a disciplined user: You can cover a charge you might not have the cash for right away, build your credit and earn better rewards and perks. Decide which set of benefits and risks better suits your personal situation.
A secured credit card shares some similarities with a debit card, however they do come with the risk of running up debt and accruing interest charges. Secured credit cards are designed for anyone looking to build their credit. They require a security deposit as collateral that acts as the credit line, and your payments are automatically drafted from your security deposit every month. After you build your credit for a while, you may be able to graduate to an unsecured credit card, or traditional credit card, which does not require a security deposit and may offer better rewards and perks.
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