Learn about the difference between bank
issued debit Cards and Credit Cards
More spending power? Greater financial control? Better rewards?
Whatever you’re looking for, Credit and Debit Cards come with their own unique features and benefits.
Credit Cards
All the control of a debit card, with added rewards and benefits
A Credit Card is a convenient way of making every day payments, and helping you get rewards while you’re at it. There are also great benefits you get on your Card that debit cards may not offer.
Why choose an American Express Credit Card?
More rewarding
Depending on the Card you hold, you’ll earn Membership Rewards points or Airpoints Dollars™ for every dollar you spend on purchases. Membership Rewards points can be redeemed1 for flights, accommodation, gift cards, or paying for purchases you make on your Card2. Airpoints Dollars will be automatically transferred into your Airpoints account to use with Air New Zealand.
Turn your everyday spend into travel
With eligible American Express® Cards, you can transfer Membership Rewards points to any of our seven Airline Partner Programmes3, such as Air New Zealand, Qantas or Velocity, Or you can use points to pay for any travel booking you make with Webjet4 or helloworld5.
More flexibility
A Credit Card gives you the option to pay the minimum repayment, the full closing balance, or an amount in between. You incur interest charges if you don’t pay your balance in full.
Cash flow
Use your Card to make purchases for the things you need straight away. Payment doesn’t have to be made until your statement balance is due, helping you to free up your cash flow in the meantime.
Fraud Protection
Any purchase you make on an American Express Card is covered by Fraud Protection6, so you can shop with confidence online around the world knowing American Express has you covered.
Helpful benefits
Depending on the Card you choose, you can enjoy complimentary Travel Insurance or retail Purchase Protection7 when you make a purchase with your Card.
Debit Cards
Access your money quickly and conveniently
A debit card (or bank card) allows you to make purchases with money you currently have in your bank account. Instead of carrying cash, a debit card is a convenient way to access your own money from your bank account.
Why choose a debit card?
Use money from your bank account for transactions
Use only the money you have available to you in your bank account.
Withdraw money from an ATM
The most common type of debit card is an ATM card which allows you to withdraw money from your bank account via an ATM using your PIN.
Your own money
The same level of credit checks are not required.
What’s the difference between a Credit Card and a Debit Card?
When you spend on your Debit Card, you’re using your own money, which is taken automatically from your savings account. This means you usually can’t spend more money than you already have.
A Credit Card, on the other hand, is completely separate from your savings account. When you buy something with a Credit Card, you are essentially borrowing money to make the purchase and this amount will need to be paid back later. Your Credit Card issuer pays the vendor, then you repay the Card company.
This allows you to spend, even when you may not have the funds readily available. You can choose to pay off the full balance of your spending each month or repay it over time. You will be charged interest if you do not pay the balance in full each month. If you need to make a larger purchase, a Credit Card could be a more convenient option.
Credit Card vs Debit Card
There are several differences between Credit Cards and Debit Cards you should know about. Let’s take a look at the key features of Credit Cards vs. Debit Cards:
Debit Cards:
- Use money you already have
- Mostly do not charge a fee for use, though some may have a monthly maintenance fee.
- Allow you to withdraw cash from an ATM for free, depending who you bank with.
- Have no effect on your credit score, unless used with an accompanying overdraft.
- Don’t tend to offer rewards, such as air miles, cashback or points.
- Are available to most people, regardless of credit status.
Credit Cards:
- Offer you a line of credit, where you’re advanced credit by the provider to be paid off monthly, either in full or in part. Interest charges apply when not paid in full.
- Spending isn’t limited by the size of your bank account, but rather, by the Credit Limit you qualify for.
- Generally, come with greater protection than most Debit Cards. Some Credit Cards offer fraud protection, Card Purchase Cover, and sometimes insurance cover (travel insurance, for example).
- Often offer rewards for use.
- Charge interest on any balance not paid off in full at the end of the billing period, which is usually monthly. Other fees can accrue, such as over-limit fees and late payment fees.
- Carry the risk of accumulating debt if the balance is not repaid faster than the credit is spent.
- Can negatively affect your credit score if the balance is not paid down each month.
- Are usually unsuitable for cash withdrawals, as a high fee and interest rate may be charged.
How to choose: Credit Card or Debit Card?
A Debit Card offers a straightforward way to spend with little to no risk of debt and often with no fees or monthly payments. Debit Cards work by taking money you already have in your savings account. However, you may not enjoy some advantages a Credit Card may offer.
When handled well, choosing a Credit Card from American Express can offer you:
- A wide range of desirable rewards, such as Membership Rewards points (if you hold a points earning Credit Card) and travel benefits.
- Fraud protection4.
- Safer spending while abroad.
- More purchasing power to afford bigger purchases and the option to pay them back over time (interest charges will apply).
What tools can help you better manage your American Express Card?
There are a range of handy tools that will help you better manage your Credit Card. Here are a few of them:
- Set up personalised alerts for:
- Your current total balance.
- When your bill needs to be paid.
- Large transactions made on your Card.
- Approaching your credit limit.
- Your current total balance.
- Manage your bills more easily by setting up direct debits to make an automatic payment each month.
- Download the Amex App for an easy way to check your current balance and all recent transactions.
- Use American Express Online Services to keep track of transactions made by you and Supplementary Card Members.
Why is building a good credit rating important?
Good credit management and smart spending habits can help with getting approval to borrow in the future.
Some things that credit providers may consider when reviewing your credit file are:
- The type of credit you have applied for.
- How often you apply for credit.
- Any overdue accounts listed against your name.
To maintain a good credit history, you should always pay your bills on time. If you are moving, ensure you provide your lenders with your new address and other contact information to avoid late or missed payments.
Need to know more about how Credit Cards work?
There are a few things that are useful to know when choosing a Credit Card – from rewards, fees, interest charges and credit limits, to understanding the different Cards available to you.
Explore our Personal Cards
Airpoints™
Earn Airpoints
Dollars™ fast
Rewards
Earn points from
everyday spending
No Annual Fee
Card Member benefits
with no annual fee
Membership that gives you more
As an American Express Card Member you can take advantage of more travel benefits, richer rewards and outstanding service, plus 24/7 Global Support.
- Membership Rewards Programme. Subject to the Terms and Conditions of the Membership Rewards Programme available at https://www.americanexpress.com/en-nz/rewards/membership-rewards/terms
- Points for credit. Points may be redeemed by the Basic Card Member for a credit on the Primary Card Account (the Card which your Membership Rewards points balance appears online). American Express may decline a Points for Credit request where the Card Account or Card Member’s other accounts with American Express are not in good standing or overdue. The redemption of Points for Credit will be administered solely by American Express within 3 business days and cannot be reversed. Redeeming Points for Credit is not available for redemption by Corporate Card accounts and is not redeemable for cash via Credit balance refund.
- Membership Rewards Points Transfer. To transfer Membership Rewards points into an airline partner programme or a frequent guest partner programme, you must be a member of the partner programme. Membership of the partner programme is the Card Member's responsibility and is subject to the terms and conditions of the applicable programme. A joining fee may apply. Minimum redemption amounts apply. Partners are subject to change.
Visit https://www.americanexpress.com/en-nz/rewards/membership-rewards/terms for details. - Webjet Partner terms and conditions apply. Available to New Zealand enrollees who reside in New Zealand only. Enrolment in the New Zealand American Express Membership Rewards Programme is required. A fee may apply. Flights are subject to availability. American Express accepts no responsibility for any information passed by you to Webjet. A minimum of 10,000 points must be redeemed at any one time. If using 'Points + Pay' the pay amount will be automatically billed to your Card Account and will appear on the first billing statement following redemption.
- Helloworld Points are only redeemable in store. A minimum of 10,000 points must be redeemed at any one time. Subject to the Terms and Conditions of the American Express Membership Rewards programme.
- Fraud Protection. Provided that you do not contribute to or unreasonably delay reporting any misuse of your Account and you have complied with your Card Conditions, you will not be held liable for any unauthorised charges.
- Insurance. American Express Platinum Card Insurances are underwritten by Chubb Insurance New Zealand Limited (Company No. 104656) (Chubb) and are subject to the terms, conditions and exclusions contained in the American Express Platinum Card Insurances and policy of insurance between American Express International (NZ), Inc. (Company Number 867929) (American Express) and Chubb. This product page does not take into account your objectives, financial situation or needs. It is important for you to read the Platinum Card Insurances and Assistance Terms and Conditions and consider the appropriateness of that insurance in relation to your individual requirements.
- No pre-set spending limit. No pre-set spending limit does not mean unlimited spending. Your purchases are approved based on a variety of factors, including current spending patterns, your payment history, credit records, and financial resources known to us.
- Late Payment fee. A charge of three point two five percent (3.25%) or $20, whichever is greater, will be charged on any overdue amount.