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Credit cards vs debit cards vs loans: Which is right for you?

May 26, 2023
min read

Each payment method can be beneficial in different circumstances.

Man looking at finances on phone

Whether you’re searching for a way to make everyday purchases or trying to cover a big expense, it’s not always clear which payment method is best.

Should you use your credit card, your debit card, or take out a loan?

It may make the most sense to have a combination of all three that you can use in different situations.

Not sure which one is the best fit? We’re comparing credit cards, debit cards, and loans:

Credit card

Credit cards are an easy and convenient way to make purchases both in-store and online. If you like shopping online, then you know that many online retailers only accept credit cards, not debit cards.

When you use a credit card, you borrow money from the financial institution that issued the card. You won’t pay interest on your balance as long as you pay it off in in full before your statement due date.

This allows you to make a purchase today even if you don’t have the money in your bank account yet.

But if you don’t pay off your balance before the due date, you will be charged interest and it will affect your credit score.

By using your credit card, you can build your credit history. Having a credit history is important when you apply for a mortgage or loan in the future, and getting your first credit card is a great way to begin building your credit history.

To build a strong credit history, make sure you pay your bill on time, every month.

Many credit cards offer rewards based on your usage, giving you access to perks such as cashback or travel rewards. Read your card information carefully—many cards offer rewards that you may not be aware of, such as mobile device insurance or travel insurance.

With a selection of Cambrian credit cards, you can choose from a variety of flexible rewards, including cash rewards, merchandise, travel, gift cards, and charitable donations.

Debit card

Your debit card is connected directly to your bank account, which means the cost of your purchases is immediately taken from your account.

You might prefer this to a credit card because you’ll know exactly how much money you can spend at any given time.

With a Cambrian debit card, you have overdraft protection. This means that your debit card won’t be declined if you lack the funds to pay for a purchase.

Keep in mind that this is intended for emergencies only. There is a fee plus interest charged for every purchase you make that you don’t have sufficient funds for.

Some financial institutions will charge you monthly service fees for your debit card. But at Cambrian, a monthly recurring direct deposit into your banking account is all you need to shop without getting dinged, thanks to the Unfee.


A personal loan is a great way to pay for life’s bigger expenses, such as a home renovation or your education. You can use it to fund larger purchases that you’ll pay off over a longer period, such as a car or home renovation project.

You can also take out a loan to consolidate high-interest debt. Loans typically have lower interest rates than credit cards, which means you can consolidate your debt into one easy loan payment to save thousands of dollars in interest costs.

Learn more about the different types of loans.

Comparing credit cards, debit cards, and loans

Credit card vs debit card vs loan comparison table

Try the Cambrian Cash Back World Elite Mastercard!

At Cambrian, we offer our members debit cards, credit cards, and loans—so that you can choose one that best meets your needs.

Active a new Cambrian World Elite Mastercard today, and you’ll get your first $120 annual fee rebated as a statement credit, along with 15,000 Welcome Points. Apply online today!

Today’s Rates

*All rates and yields subject to change without notice.
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