By M Katie Helle, CPA

Many young adults are not aware of the difference between a credit card and debit card, especially since they look similar and both display a Visa or Mastercard logo.  Both cards offer convenience in that you do not need to carry around cash but differ greatly in where money comes from.

A debit card simply draws money from your checking account when you swipe your card.  This purchase then reduces the amount of money in your checking account.  Typically, most banks will decline a purchase if there are not enough available funds in your checking account.  Because of this, it is very important to keep track of your running balance to ensure you have enough funds to cover your purchases made with the debit card.

A credit card allows you to borrow money against a line of credit, which is then paid back later.  Credit card companies will send you a statement each month showing you the balance you spent and what is owed.  If your monthly balance is not paid for in full, you will incur interest that also must be paid back.  Credit cards can be a way for young adults to start building their credit.  Because credit cards impact your credit score, it is important to pay timely and in full.

When making purchases, it is important to do a self-check to ensure your can afford what you are purchasing before pulling out your credit or debit card.  No matter which card you decide, make sure to shop around for both credit and debit cards as many banks offer different benefits.


Katie Helle has been in public accounting since 2009, with experience in individual and small business taxation, specializing in payroll and sales tax reporting and compliance and QuickBooks accounting software. She is an Arizona native and resides in Chandler, Arizona with her husband, young daughter, and two goldendoodles.  Outside the office, she is actively involved with community outreach, enjoys fitness, and can be found with a power tool or two in her hand for her many crafts.