Debit, credit, or prepaid card

Credit, debit, and prepaid cards may look alike.  But each works differently.   

Before selecting a card, it is important to consider how the cards differ, the best way and time to use each, and the available safeguards.

American plastic : boob jobs, credit cards, and our quest for perfection
Laurie Essig.
Boston, Mass. : Beacon Press, c2010.
Essig (sociology, Middlebury College, Vermont) explores America's increasing obsession with plastic surgery, and how our easy access to credit cards feeds this obsession. In the first half of the book she traces the history of plastic surgery, and looks at the current trends in procedures women (middle-aged white women are by far the biggest recipients of plastic surgery) are requesting most. Following is a more general look at the current media for clues as to what motivates a person to go into serious debt to correct her "ordinary ugliness." This accessible text will be relevant to the advanced high school student interested in current social phenomena, as well as the general reader. Annotation ©2011 Book News, Inc., Portland, OR (
The American Bar Association guide to credit and bankruptcy : everything you need to know about credit repair, staying or getting out of debt and personal bankruptcy
American Bar Association.
New York : Random House Reference, c2009
In these challenging financial times, the American Bar Association Guide to Credit and Bankruptcy, Second Edition, offers clear and essential information on how to build and protect your credit and wisely handle debt, and what to consider when bankruptcy seems like an option. Updated and revised to reflect current legal realities, this book will help you determine what you can do on your own-and when to reach out to a lawyer-when you are working to:
Credit cards and the law
by Margaret C. Jasper.
New York : Oceana, c2007.
  1. Includes bibliographical references (p. 175-176).
  2. An overview of the credit card system -- Credit card legislation -- Debit cards, ATM cards and gift cards -- Credit card terms and conditions -- Credit card loss, theft and unauthorized use -- Equal credit opportunity -- Establishing, maintaining and rehabilitating credit -- Credit card debt : management and collection.
Great credit guaranteed! : improve your credit in only 90 days ... or your money back!
by Arny Gold.
Boca Raton, FL : Garrett Pub., c2007.
Great Credit is essential today. Without great credit you cannot get a mortgage, finance a car, obtain a credit card or even charge a good meal at a fine restaurant. Whatever credit you can get you will pay a premium for. Nearly everything you buy on credit will be more costly. Great Credit...Guaranteed! begins with an in-depth explanation of how our credit system operates, and the key role the credit bureaus play in compiling and reporting credit. This book is designed to give you every legal tool you need to protect your credit rights and use them for your maximum protection...but that's only the beginning.A practical step-by-step system to establish, repair or build credit. Written by Americas Money Doctor, this is the perfect book for anyone with less than perfect credit, Turn bad credit or no credit into an A credit rating in only 90 Days. Complete with sample letters.
The American Bar Association guide to credit & bankruptcy
New York : Random House Reference, c2006.
The American Bar Association Guide to Credit & Bankruptcy offers the information you need to know to apply for, build, and protect your credit and make the right choices when it comes to debt management and bankruptcy. The team at the American Bar Association, the country's best source of legal expertise, reveals your rights and options on credit card rates, home equity loans, auto financing, different types of bankruptcy, and much more. This essential guide includes the new requirements introduced by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Credit cards

Credit cards help establish a good credit history.  These cards provide a credit line allowing services and materials to be charged up to a limit set by the credit card company.  The advantage of a credit card is that money is not withdrawn automatically from the person's bank account.  Usually payment is made monthly upon receipt of a statement listing purchases. 

In 2004 Americans charged $686 billion using nearly 229 million signature debit cards.


Credit card users need to

  • Know their limits -- exceeding the limit can result in fees or card cancellation
  • Pay on time -- not doing so can damage a person's credit history
  • Shop around -- credit card companies offer various fees, safeguards, finance charges, and statement options

In 2002 Americans purchased $180 billion of goods using a PIN with a debit card at retailers nationwide.

By contrast, U.S. consumers made $318 billion in purchases during 2002 using a VISA or MasterCard-branded debit card without a PIN. 


Debit cards, also called check or ATM cards, deduct purchase amounts from a  bank account.  Debit cards offer the convenience of  using a card instead of cash for purchases and can be used at ATMs to get cash.  Debit cards can be used like credit cards (sign for purchases and the money is taken within a few days from the account).  Or a PIN (personal identification number) is used with funds deducted from the bank account immediately. 

Debit card users need to

  • Have sufficient funds in the account to cover purchases
  • Keep PIN confidential
  • Know current account balance -- take receipts and keep checkbook up-to-date
  • Shop around -- debit card companies offer various fees, safeguards, finance charges, and PIN vs non-PIN use options 

Prepaid, or gift cards, have an amount attached to them that can be spent by the recipient.  They can be safer than giving cash and more flexible than gift certificates. The amount on the card does not need to be spent at one time and can be replenished for future gift-giving occasions.  Some gift-card issuers allow givers to electronically personalize the card or choose from popular designs. 

Prepaid card users need to

  • Protect the card - no identification is required to use it
  • Check for expiration dates

Credit, debit, or prepaid card?  Which card is best for you?

Article by: St. Louis Public Library staff