With a wide variety of payment options available these days, it can be confusing to know when which one to use. Cash transactions begin and end by handing over the currency to pay. Debit pulls the funds directly from your checking account at the time of purchase. And credit is borrowed from the issuing financial institution but needs to be paid back within a specified timeframe or a fee and interest will be imposed.

So what types of transactions are best for each of these payment options?


  • When you’re making small purchases
  • When you only want to spend a set amount


  • If you’re shopping at small, local businesses and wish to use a card instead of paying cash, use your debit card. Business owners are charged more to process credit transactions than debit card transactions.
  • When you don’t want to overspend is the funds in your checking account but still want to use a card


  • If shopping online then it’s best to use credit because they provide more purchase and fraud protection than debit cards
  • If you’re getting gas or booking a hotel, use a credit card. Typically required for booking a hotel, credit cards are more convenient for these transactions. A debit card could put a hold on your account for more than the purchase amount, which might result in limiting funds you may need elsewhere. If you want to build up your credit score, use your credit card and ensure you consistently pay the invoice on time.

Realize additional savings by using specific store cards when shopping there, or more points when using rewards cards. There are pros and cons to using all of these payment options though. Cash can help you from over-spending because you only have a set amount in your wallet. Debit and Credit cards keep electronic records of your purchases and allow you to track your spending and better manager your budget. They are also more secure with either a PIN or signature requirement. Cards also usually offer rewards programs, such as UChoose Rewards® free with Granite State Credit Union’s debit card. If you make purchases as credit, and sign your name, you earn points to use for gift cards and other great items.

All of these payment options can work for you – it’s up to you to decide which helps you stick to a budget and gives you the best security, rewards, and convenience.