SUMMARY: Most consumers consider debit cards and credit cards to be the same. But they’re different.

When you reach into your purse or wallet to pull out a payment card, there’s no real physical difference between your debit and credit cards. They look the same, work the same way in the merchant’s point of sale (POS) terminal and they get the job done. Other than entering a PIN for purchases using a debit card, the two transactions seem interchangeable.

But consumers should know that, behind the scenes, debit and credit cards work differently. One pulls money right from your bank account while the other is covered by a credit card issuer and paid for later. Debit card fees are low or sometimes nonexistent, while credit cards usually command a double-digit interest rate, plus, some even have an annual fee. (Take note: The Credit Union offers cards with lower-than-average rates and no annual fees.)

Debit cards may help keep you on a budget as long as you monitor your account to minimize the risk of overdrafting.

Credit cards, however, are great for building credit provided you make timely payments and keep your spending to 30% or so of your credit limit.

But another big difference is security risks. Credit cards carry less risk in accessing your personal funds. When deciding which card to use, Anthony Fletcher, Payments Vice President at American Airlines Federal Credit Union, tells consumers to consider this type of security risk. If a hacker gets your debit card information and uses it nefariously, he or she may be able to access the cash in the related account. Credit card companies, on the other hand, provide protections for their customers and can more readily thwart criminal activity.

There are recourses for victims in both of these scenarios, but Fletcher says credit card holders are generally better protected from fraud than their debit-using counterparts. “There are protections in place for both types of cards, but I generally recommend using credit,” he explains. “That way, any money spent is from your credit line and not your bank account.”

It’s also important to remember that when using your debit or credit cards with payment apps, make certain only to send money to people you know to avoid becoming a victim of fraud.

Merchants also have to pay interchange fees in exchange for using the credit card systems. And while these fees can’t be legally passed down to consumers, stores may try to make up the difference by charging higher prices for using a credit card versus cash or debit. This is something to keep in mind the next time you dig into your wallet or purse for your plastic.