Credit cards vs Debit cards

Would it be possible for Choice to do a brief article on this topic? Cost vs benefits, uses, fees & charges etc.

For example, why does it cost (about $5/mth) to have a debit card when you are using your own money? This seem strange to me when it is possible to have a credit card with the same fee as an annual cost & use the bank’s money.

I have found lots of information on credit cards on the financial institutions’ web sites I have looked at, but information on debit cards is a lot scarcer.

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The market is very competitive and it is up to the consumer to ensure that they get the best value - we even found a credit card that allows overseas travel without charging any fees, not even exchange fees. It is very important to investigate the market and use the cards that charge the least fees, or rather no fees, and allow as many days for payment. Then you must ensure that you pay your card outright, so use the card as if it is cash in your pocket, so that you don’t overspend. I am sure that many consumers already know and do this, but this is just a gentle reminder of how to best manage card-spending.


Hi @meltam, interesting to hear that you’ve had trouble sourcing information on debit cards. You’re right though, there’s a lot out there on credit cards and not so much on debit cards (usually because they’re attached to your savings account and not front of mind).

Our friends over at Mozo (they’re excellent - definitely check out their product comparisons) have done a comprehensive comparison on debit cards. I hope you find this helpful.

Chers, Tilly


Hi @meltam, in telation to monthly charges, it is easy to have them removed with debit cards…just tell your bank that you are thinking of closing your accounts with them and plan to move to another because of the fees. …we did this and it is amazing how quickly these small monthly fees are waived.


I have had a debit card for over 16 years and have never been charged a fee. I am a member of a Credit Union, joined because I didn’t want my retirement pension eaten up by the Big Banks. So far, so good.


I like ING because they pay all atm fees for any atm, as long as you deposit $1000 per month in the account. So your wages should cover that. No, the money doesn’t have to stay in there.


It’s not that easy to do an apples to apples comparison. Depends on the financial institution but in my experience, credit unions fare the best. But even with them, whether you end up paying a fee or not depends on which options you select and how you conduct your account.


As a suggestion I would say if you can get rid of your credit card do it. I have switched to a debit card and feel so much better knowing I am not running up a debt. I use ING and they even give me a rebate for every purchase under $100 for the debit card paywave system.

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I’m definitely a keen supporter of debit cards over credit card but something I was caught out on is that although it may be a Visa (for example), it’s not a Visa as far as everyone is concerned. For example: When hiring a car I was not allowed to use a Visa debit card, only a credit card… this may not be the case for all hire car companies but if you’re planning on traveling with your Visa debit card… be wary.


Re the Mozo link: 6 cards - that’s hardly “a comprehensive comparison”

2 conspicuously absent cards are Citibank Plus Visa Debit and ME Bank Debit Mastercard. Neither of these has account keeping fees, and the Citibank card doesn’t charge for foreign transactions either.


I agree with @brianvcrowley. I found the Mozo link most disappointing. It had the feel of those paid sites that only list their subscribers rather than a ‘comprehensive comparison on debit cards’.

Reading the posts on this thread, it is apparent that terms and conditions vary considerably, and that there is a green field here for Choice to do a real comprehensive comparison.

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It is not just hire cars that can be a problem. As a contrived example assume your pay is deposited every Thursday. You book a hotel for a week and check in on Sunday. You present your debit card and they will place a hold or actually debit your account for the full stay. Even though you could have plenty of funds available for checkout on Saturday, you could be caught out between Sunday and Wednesday. Experiences vary, but.

Debit cards do not always provide the same consumer protections from transactions going bad that credit cards do. Many do if waved (transacted like a credit card) but do not if transacted like an EFTPOS card (CHQ/SAV), and a few have none at all. When a debit card allows disputes your money is often tied up for the duration, and dodgy “charges” can do you. Like giving someone cash and then asking for it back.

It is important to understand how your debit card does and does not work as compared to a credit card.


Aldi don’t care what card it is.

Tap and go instead of insert and you will be slugged a fee for a wirelees credit card transaction.

The sad part is both the banks and Aldi blame each other.

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Please read about debit cards and do not blame Aldi for your lack of understanding. Aldi, in my experience, makes a good effort to keep the uninformed from waving their debit cards and thus attracting the credit card surcharges. Locally there are signs on the terminal, and the checkout staff also warn us verbally. Why blame Aldi when the “profit centre” is the bank and Mastercard/Visa providing “valuable services” as they tell us?

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Credit cards are a redundant racket – sustained only by look-alike, cartel-like scheme rules that allow unfairly excessive fees and interest charges to be levied on merchants, card-users and borrowers when the better alternative would allow similar functionalities for low-cost debit card accounts – such accounts backed by a line of credit for customers wanting it, and entitled to have it, on less usurious terms than charged on credit-card debt.

Banking regulators allow, condone and encourage any money-grubbing behaviour of banks that bolsters their profits in the first instance and underwrites their ‘goodwill value’ in circumstances where they are best merged into a more viable conglomerate.

It is the banking regulators that should be pilloried for condoning the credit-card racket.

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Aldi is not the corner store, struggling from bank charges.
The signs on the terminal are tiny and for many, illegible.

When the big rushes are on at the register, they don’t point it out at all.

If they really were concerned they would disable the tap and go feature.

Don’t blame my ignorance for their gouging.

It would not be surprising if Aldi stores varied in how their staff communicate this to customers. Yes, their signs are small but they can only be so big on the terminal and your point they should be more prominent is spot on. You are correct that disabling paywave would be best for customers’ pocketbooks. Paywave is yet another convenience rolled out as a profit centre not a service.

There seems little reason paywave would not be able to detect a debit card and offer the CHQ/SAV/CREDIT option just like putting it in the terminal - except it would reduce the associated fees. The banks argument for not doing that is that paywave is a convenience and having to push a button negates that. Sure it would (/sarcasm font).

There was no intention to blame your ignorance for their cost recoup. Processing through Visa/MC networks is more expensive than through the EFTPOS systems. pmair put it succinctly although his/her line of credit is exactly what a credit card is, although at usurious interest rates. The underlying problem is with government regulations (or the lack thereof) and banking industry. I recently read that in the USA overall prices are about 4-5% (?) higher to account for merchants’ Visa/MC/Amex/DC/Discover fees.

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I have a ME CR Card and a ME DR card. They without notice sent the DR card to replace our old ETAPOS card but the information provided was very confusing making it look like a combined CR and DR card. On using it it seems to work that way. It is linked to our savings account, we presume however if you use pay wave it deducts funds from the CR Card account.

I am not real happy with ME for the way they provided this card and the incoherent information they provided. Reading the posts in this thread has not clarified the matter much. How do DR cards work with paywave and why does it transact through our CR Card account when we expected it to deduct from credit balances from our savings account?

Should we not be entitled to know from which account the payments are being made when we make purchases?

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Ask ME for confirmation, but any debit card that is waved is still a debit card that is debited from your default debit account, it is just processed through the credit card network with higher fees and more “valuable services and protections” delivering profits for Mastercard or Visa and probably ME.

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I see them as one and the same. Sure, the fees may vary but if your debit card still honours transactions when your balance is below zero, isn’t it just a credit card? A debit card is subterfuge!

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