Although you might wish to use a credit card for emergencies and to establish a good credit rating, you might also look into the possibility of applying for a debit card. The big advantage of a debit card is that you don’t always have to carry cash and thus don’t run the risk of losing it or having it stolen. A disadvantage is that a debit card provides direct access to your checking account, so it’s important that you keep your card in a safe place and away from your personal identification number (PIN). The safest way to protect your account is to commit your PIN to memory. If you lose your debit card or credit card, notify your bank immediately.

Another advantage of a debit card is that, if you choose not to participate in your bank’s overdraft protection program, the amount of your purchases will be limited to the funds in your bank account (Overdraft protection links your checking account to a savings account, credit card, or line of credit and uses that account to pay transactions that would have otherwise triggered an overdraft fee). In this case, using a debit card versus a credit card can help you limit your spending. Although the term overdraft protection may sound appealing, keep in mind that if you choose to enroll in such a program, your bank may charge a hefty fee if you spend even just a little more than what you have in your account. And speaking of fees, be aware that if you use your debit card to withdraw cash from an ATM outside your bank’s network, you will likely be charged one or more transaction fees.