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Credit card vs debit card: playing your cards right

They say money talks, but when did you last hear what it had to say? We asked  social media illustrator InstaChaaz to listen in so we can get to know our money better.  Check out the rest of our MoneyTalks  blogs.

Hands up who uses these guys interchangeably? Yup – it’s easy when they look so similar, but actually they do different things and should play different positions in your financial team. 

So, as manager of YourFinances FC, here’s some thoughts for your financial play book to help you plan who to field and when.   

Debit cards – the backbone of your team 

Debit cards are just like using cash. They take the money from your account to pay for whatever you’re buying. It’s as if you paid for something by taking money out of the cashpoint and handed it over the old-fashioned way.

They’re as simple as that – a solid player on your team to get the job at hand done. 

Credit cards – flexible players  

Credit cards are your wallet’s most flexible players. They can do a lot of jobs, but before you get them on the pitch it’s good to know how they work to keep your finances out of the relegation zone. 


Credit cards are basically a loan that you can draw on as you need and pay back flexibly within agreed terms. This concept is called revolving credit.  

As it’s a loan, when you apply for a credit card, you will be credit checked. This will appear on your credit file. Your card will have a credit limit (the maximum amount you can borrow on your card) and an APR (the interest you will pay on the money you borrow). 

How they work 

After you’ve used your credit card to buy something, you usually have a certain amount of time to pay it back before the provider starts charging interest. This means that if you pay off your balance in full each month, you can avoid paying interest.  

If you don’t pay in full, you’ll be charged interest on the balance on your card. At the very least you need to pay back the minimum the credit card provider requires or you’ll probably be charged fees. 

When to play them  

  • When you need your reserves on the field. You might call on your credit card when you need a cash boost to pay for something big, like a holiday or a new dishwasher. You can pay for it outright, then spread the cost over the following months. But you need to make sure that you’re on time and up to date with your repayments, or you could end up paying high interest charges on your credit card balance. 
  • When you play a big set piece. One of the benefits of credit cards is that they often have different add-ons. So, if you carefully plan out what you want to do, you can take advantage of things like 0% balance transfers, cashback or points. These can be really useful, but you need to make sure that you’re on top of repayments and when any introductory offers expire, for example. 
  • When you’re playing it safe. Did you know that a lot of your credit card purchases have insurance built in? The Consumer Credit Act covers you for purchases between £100 and £30,000 if they’re faulty or the company you bought them from goes under. 
  • When you’re building up to something big.  Buying things on your credit card and then paying the bill promptly is a really good way to show that you can responsibly manage credit. It’s a good tactic if you’re nurturing your credit score so you can apply for a loan or a mortgage.