October 2025

C a s c a d i a n C a s c a d i a n
Vol. 21, No. 9 A Publication of the Cascades at St. Lucie West Residents Association, Inc. OCTOBER 2025
Safety and Security Committee
William Gordon Jr., Marjorie Osheroff,
James Fitzgerald, Vincent DeVita, James O’Brien, Barry Karet
Credit Cards vs. Debit Cards: An Overview
Credit cards and debit cards are often used
interchangeably, but they have distinct differences that
can affect your financial situation. They look nearly
identical; they have 16-digit card numbers, expiration
dates, magnetic strips, and EMV chips. However, the
way they function and the benefits they offer vary
significantly.
Debit cards allow you to spend money by drawing on
funds you have deposited at the bank. Credit cards
allow you to borrow money from the card issuer up to
a certain limit to purchase items or withdraw cash.
We’ll explore the key differences between credit cards
and debit cards, including their pros and cons, and how
to choose the right one for your spending needs.
KEY TAKEAWAYS
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Credit cards give you access to a line of credit
issued by a bank, while debit cards deduct money
directly from your bank account.
Credit cards offer better consumer protections
against fraud than debit cards linked to a bank
account.
Newer debit cards offer more credit card-like
protection, while many credit cards no longer
charge annual fees.
When comparing credit cards with debit cards
linked to a bank account, it’s important to consider
the fees and benefits.
Unlike credit cards, there are debit cards for kids
and teens that can help you teach your child good
money management habits.
Warranty and Purchase Protections
Some credit cards also may provide additional
warranties or insurance on purchased items beyond
those the retailer or brand is offering. For example, if
an item bought with a credit card becomes defective
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after the manufacturer’s warranty has expired, it is
worth checking with the credit card company to see if
it will provide coverage. You may also have purchase
and price protection built-in to help you either replace
stolen or lost items or refund price differences when
the item you purchased is sold elsewhere for less.
Fraud Protection
As long as the customer reports the loss or theft in a
timely manner, their maximum liability for purchases
made after the card disappeared is $50. The Electronic
Fund Transfer Act gives debit card customers the same
protection from loss or theft—but only if the customer
reports it within 48 hours of discovery. After 48 hours,
the card user’s liability rises to $500; after 60 days,
there is no limit.
What Is a Debit Card?
A debit card draws directly from the funds in your
checking or savings account when you make a
purchase. Unlike a credit card, there is no borrowing
involved—if you don’t have the funds in your account,
the transaction may not go through (or you could face
an overdraft fee). Debit cards offer the convenience of
credit cards and many of the same consumer protections
when issued by major payment processors such as Visa
or Mastercard.
There are three main types of debit cards:
•
Standard debit cards draw on your bank account.
•
Electronic benefits transfer (EBT) cards are
issued by state and federal agencies to allow
qualifying users to use their benefits to make
purchases.
•
Prepaid debit cards allow people without access
to a bank account to make electronic purchases up
to the amount preloaded onto the card.
Frugal consumers may prefer to use debit cards because
there are usually few or no associated fees unless users
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