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Debit cards and credit cards: What’s the difference?

Planifier votre budget en vue de votre arrivée au Canada Desjardins

In Canada, there are 2 types of cards you can use to make purchases. Here’s a description of both types and the benefits of each :

Debit cards

You receive a debit card for free when you open a Desjardins account (to open an account, you need to pay a $5 membership share). Every time you use the card, your account is debited immediately. In other words, the money is taken out of your chequing account right away. That means you need to have enough money in your account to make the purchase or withdrawal.

Why use a debit card?

You can use it to:

  • Withdraw money from automated teller machines (ATMs)

  • Log in to do your banking online (for example, AccèsD)

  • pay for purchases in stores

Credit cards

You need to apply to get a credit card (there’s a form to fill out). How much you can buy with your credit card depends on your credit limit. You must be 18 or older to get a credit card.

Some credit cards are free, and others have a fee. Credit cards are similar to deferred debit cards—you can use them to buy things and you’ll be billed for them later. The financial institution that issued your card temporarily lends you the money.

Each month, you get a statement that shows all the purchases you made. If you pay the entire balance before the end of the billing period (21 days), you won’t be charged interest. Different credit cards have different interest rates.

Why use a credit card?

You can use it to:

  • Make reservations or purchases online (like insurance, travel and hotel rooms)

  • Pay for purchases in stores (to buy things like clothing, furniture and food)

  • Build your credit history (very helpful if you want to borrow money from a financial institution)

4 tips for managing your credit card so you never have to pay interest

  1. Pay your entire balance every month.

  2. Set up automatic payments so you never forget.

  3. Don’t use it to withdraw money from the ATM (you’ll be charged a withdrawal fee and interest).

  4. Choose a realistic credit limit.

Learn more to get ready for life in Canada : desjardins.com/PrepareLiveCanada

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