Should I use a debit card or credit card?

Debit cards vs. credit cards – which is best? As with many financial products, it depends on your personal circumstances and what you are trying to achieve using your card.

A good rule of thumb is that credit cards are good for one-off purchases, often of quite high price, while debit cards are good for regular spending, especially at low value up to the contactless card payment limit.

But what else can help you to decide if you should use a credit card or debit card? Here are some of the features of each that you should keep in mind.

Features of debit cards

Debit cards are usually:

  • Linked to the balance of your account.
  • Spend from the positive balance of that account.
  • Don’t involve any borrowed money/credit/debt.
  • Don’t incur interest as there’s no debt to repay.
  • Fee-free for most normal card purchases.

Your debit card is like a cash card connected to your account – it’s a shortcut to spend money you already have, so that you don’t have to find an ATM and make a cash withdrawal.

This also means a debit card can sometimes help you to avoid paying cash machine withdrawal fees, as you can just pay on card instead, and the correct amount of money still comes out of your account.

Features of credit cards

Credit cards are usually:

  • A separate product with their own balance.
  • Spend money you do not already have, and must pay back at a later date.
  • A form of credit – will show on your credit file and affect your credit rating.
  • Charge interest if you do not pay off the balance in full by the end of each month.
  • May incur extra fees, especially when using a credit card to withdraw cash.

Remember that when you spend on a credit card, it’s not your money – every purchase is similar to setting up a short-term loan, often at interest rates close to 20%, and the longer you take to pay it off, the more it will cost you.

Credit cards do have some advantages though. For instance, if you use a credit card responsibly, your credit score will be higher than if you do not have a credit card at all.

You also get certain protection with a credit card – so if you buy something big, like a new sofa or a holiday, and the supplier fails to provide it to you, you may be able to claim your money back from your credit card provider instead.

Types of debit card and credit card

The main credit card providers also offer debit cards that are widely accepted too, so you should not feel forced into using a credit card if you do not want to, or if you’re worried about its effect on your credit rating.

You can get prepaid debit cards where the card has its own balance – and you do not have a fully fledged account linked with it – but these are not always accepted in as many places as a traditional debit card with an account attached to it.

As such, if you want a new debit card, it’s often best to get a new account to go with it. For example, every Arro Personal Account comes with a full branded MasterCard® debit card, accepted everywhere you see the MasterCard® Debit logo.

There’s no credit check needed as it’s not a credit card and there’s no overdraft on the Arro Personal Account, so as long as we can verify that you are over 18 and currently live in the UK, and apply our basic Fair Fit criteria, we guarantee to accept you if you’re eligible.

How to get an Arro MasterCard® debit card

It’s quick and easy to get an Arro Personal Account with a MasterCard® debit card – the whole application process can be completed in as little as three minutes.

Just fill in our online signup form to tell us your name, current UK address, date of birth and a few contact details so we can tell you your account numbers once it is set up for you.

We run an automated online ID check so you don’t have to send us any paperwork yourself. It’s fast, it’s not intrusive and it does not leave a mark on your credit record, or access your credit file at all – ever.

If everything goes well, we send your account details immediately. You’ll see your MasterCard® debit card on screen when you log in on a computer, and we’ll send you your CVV and pin by SMS, which you can use online even before the physical card comes in the post – one of the absolute fastest ways to get a new debit card which you can use online in minutes.