Debit cards and credit cards are very different. A debit card is connected to your checking or savings account, and you can only use it when there is money in your account. Be careful, however, because sometimes you can use your debit card when there is not money in your account, but you will be charged a large fee when that happens. For example, you only have $100 in your account, but you are at the grocery store buying groceries. The grocery bill totals $150, and you use your debit card. The bank or credit union will pay that bill, but they will automatically charge you a large fee, such as $30, for not having the money in your account. So, you now are responsible for the $150 grocery bill, plus the $30 fee. It is like adding $30 to your grocery bill. That is why it is important to know how much money is in your account. Remember, there could be other fees added to your account, such as an administrative fee, that you may not know about. That is why it is important to check your account frequently, or keep extra money in your checking account to avoid fees.
Most banks and credit unions will offer you a credit card from one of the major companies, such as VISA, Discover or Mastercard. Credit cards can be a good tool, or they can get you in financial trouble very quickly. If you have never had a credit card, you may think they are wonderful. You go to a store, buy a $500 computer, and use your plastic card and walk out with the computer. But unless you pay that $500 to the card company that month, you will be charged interest every month. Consider this: if you take 24 months to pay off the computer at 18 percent interest, that computer can cost you $599. Credit cards make their money from interest on unpaid debt. The card companies can charge 15 or 20 or 25 or 30 percent interest. Be sure to shop around for a low-fee, low-interest card. Only use the card to make purchases that fit into your budget. If you must get a credit card, get a low limit and try to pay it off every month, or as much as you can. Using a credit card responsibly is one way to build a good credit history.