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Debit cards and credit cards

Understanding the difference

How do they compare?

  Debit card Credit card
What is it used for? To access the funds available in your bank account. To make in-store and online purchases and pay for them later. It’s a loan, and you have to pay back the money you borrow.
How does it work? Money is immediately withdrawn from your chequing account when you carry out a transaction. You get a monthly statement telling you the balance owing and the minimum payment. If you don't repay the balance in full, interest is charged. If you pay the balance in full before the due date, you don't pay any fees.
What transactions can I carry out with it? You can make in-store purchases and carry out ABM transactions (withdrawals, bill payments, etc.).
In addition to making purchases online and in stores, you can use your card to pay bills, rent a car, and sign up for a cellphone plan more easily. You can also use it to withdraw cash, but this should be reserved for emergencies only, because fees apply and interest starts accruing as soon as you make the withdrawal
How do I get one? You’ll get one when you open a chequing account. You’ll need to submit an application to the bank. The bank will look at your credit score to decide whether or not to approve your application.
Will it help build my credit history? Transactions made with this card have no effect on your credit score. Your repayments affect your credit score, which is a key factor when you apply for other financing, like a car loan or mortgage.
Can I use it abroad? This card is not accepted in all countries for in-store purchases. If you withdraw money at an ABM you pay withdrawal fees, conversion fees, and any fees charged by the foreign bank. These fees can be high, though they are generally lower than fees for credit card withdrawals.
This card is accepted as a method of payment almost everywhere worldwide. You can use it to withdraw cash at an ABM, but this should be reserved for emergencies only as the fees are high.
What are the benefits? You can only use the funds in your account to make purchases.
Depending on the Mastercard® you choose, you can enjoy different benefits, including rewardspointscashbacks and travel perks.
How much can I spend? You’re limited to the funds in your account, unless you have overdraft protection.
The bank will set your card’s credit limit based on your credit rating.
Am I protected against fraud? The bank will refund you in the event of fraud, in accordance with the Canadian Code of Practice for Consumer Debit Card Services.
In addition to your protection under the law, Mastercard’s Zero Liability pledge protects you against unauthorized use of your credit card.
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Little details that matter

Card fees

Debit card: No fees.

Credit card: There is an annual fee for certain cards (particularly those that offer more privileges).

ABM withdrawal fees

Debit card: Withdrawals are free at National Bank ABMs and THE EXCHANGE® ABMs.

Credit card: The interest rate is higher and fees are incurred starting on the date of the ABM withdrawal. Withdrawals should be made in emergencies only.

Legal Disclaimers

® Registered trademark of Mastercard International Inc. Authorized user: National Bank.

®THE EXCHANGE is a registered trademark of Fiserv Inc.

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