Credit vs. Debit vs. Cash: How Do These Payment Methods Stack Up?

The way you pay may have lasting effects on your overall financial situation. Here’s a look at how your payment choices can impact your wallet – for better or for worse.

Typical Characteristics	Requires a hard credit inquiry
Debit	No
Credit	Yes
Cash	No

Typical Characteristics	Funds are directly taken out from your checking account
Debit	Yes
Credit	No
Cash	N/A

Typical Characteristics	Can establish and build your credit score
Debit	No
Credit	Yes
Cash	No

Typical Characteristics	Fraud protection
Debit	Sometimes
Credit	Yes
Cash	No

Typical Characteristics	Warranty protections
Debit	No
Credit	Yes
Cash	No

Typical Characteristics	Annual fees
Debit	Sometimes
Credit	Yes
Cash	No

Typical Characteristics	Rewards, points, discounts, and cashback
Debit	No
Credit	Yes
Cash	No

Typical Characteristics	Charges interest if balance isn’t paid
Debit	No
Credit	Yes
Cash	No

Typical Characteristics	Buy now, pay now
Debit	Yes
Credit	No
Cash	Yes

Typical Characteristics	Can create debt
Debit	Sometimes
Credit	Yes
Cash	No

Typical Characteristics	Debit	Credit	Cash
Requires a hard credit inquiry	No	Yes	No
Funds are directly taken out from your checking account	Yes	No	N/A
Can establish and build your credit score	No	Yes	No
Fraud protection	Sometimes	Yes	No
Warranty protections	No	Yes	No
Annual fees	Sometimes	Yes	No
Rewards, points, discounts, and cashback	No	Yes	No
Charges interest if balance isn’t paid	No	Yes	No
Buy now, pay now	Yes	No	Yes
Can create debt	Sometimes	Yes	No