Why are credit cards preferred in the US?
There are several reasons why credit cards are popular in the US: On the other hand, debit cards do not have any of these going for them.  A debit card doesn't make much money for the bank unless you overdraw or something, so banks don't have incentive to push you to use them as much.  As a result they don't offer rewards other benefits. Some people say the ability to spend more than you have is a downside of a credit card.  But it's really an upside.  The behavior of doing that when it isn't needed is bad, but that's not the card's fault, it's the users'.  You can get a credit card with a very small limit if this is an issue for you. The question I find interesting is why debit cards are more popular in your home country.  I can't think of any advantage they offer besides free cash back.  But most people in the US don't use cash much either.  I have to think in your home country the banks have a different revenue model or perhaps your country isn't as eager to offer tons of easy credit to everyone as the US is. For me, it is mostly for the fraud protection. If I have a debit card and someone makes a fraudulent charge the money is removed from my bank account.  From my understanding, I can then file a fraud complaint with the bank to recover my money.  However, for some period of time, the money is missing from my bank account.  I've heard conflicting stories of money being returned quickly while the complaint is undergoing investigation as well as money being tied up for several days/weeks.  It may depend on the bank. With a credit card, it is the banks money that is tied up. "There are two things I can think of that might be different in other countries: Until 2013, American Express, Visa and MasterCard prevented businesses from charging extra for credit card usage, and credit card surcharges still illegal in several states. Since credit card companies add a surcharge to credit card purchases, and merchants can't pass that onto credit card users, they just make everyone pay extra instead. Since everyone gets charged the credit card surcharge, you might as well use a credit card and recoup some of that via ""rewards"" points. Almost all credit cards here have grace periods, where you won't be charged interest if you pay back your loans in full within some period of time (at least 21 days). This makes credit cards attractive to people who don't need a loan, but like the convenience that credit cards provide (not carrying cash, extra insurance, better fraud protection). Apparently grace periods aren't required by law here, so this might be common in other countries as well." Your question is based on a false premise. Debit cards are more popular in the US than credit cards are. Indeed it seems to be the non-US part of the world that is big in credit cards. See here for example "Personally, I use my credit cards for everything because I get reward points (or, cash back, depending on the card), and I build credit history. I've had credit cards since I was 18 (now 22), and my credit score is in the higher end 700s which I'm told is pretty good for my age. Additionally, since I put my rent and large purchases on my credit card, I have a lot of reward points. I use these to buy things I wouldn't normally buy to try them out and see if they bring any value into my life. If not, I didn't really lose anything, but I have found value in some of those things. I realize most of this is gamification and consumerism at play, but getting that extra little thing once in a while for ""free"" which is pretty nice." "The real reason credit cards are so popular in the US is that Americans are lazy and broke, and the credit card companies know how to market to that.  Have you ever heard of the $30k millionaires? These were individuals that purchased as if they were some of the wealthy elite, but had no real money to back it up. American society has pushed the idea of ""living on credit"" for quite some time now. An idea that is even furthered by watching the US government operate solely on credit. (Raise the debt ceiling much?) Live in America for more than six months and you will be bombarded with ""Pre-Approved Deals"" with low introductory rates that are designed to sucker the average consumer into opening multiple accounts that they don't need. Then, they try and get you to carry a balance by allowing low minimum payments that could take in the neighborhood of 20 years to pay off, depending on carried balance. This in turn pads the credit companies' pockets with all of the interest you now pay on the account. The few truly wealthy Americans do not purchase on credit." Credit card fraud protection (by law), credit card cash back programs (provided by most CC issuers), and debit card fees (commonly imposed by the merchant). The crux is that with CC transactions, a small percentage is remitted to the issuing bank.  Since the banks are already making money hand over fist on CC's, they incentivize people to use them. CC security is also lax because the merchant is responsible for fraudulent charges instead of the bank.  If the merchant fails to check a signature, they are held liable for all charges if the card holder reports a fraudulent transaction.
"A credit card is a way to borrow money. That's all. Sometimes the loans are very small - $5 - and sometimes they are larger. You can have a credit card with a company (bank or whatever) that you have no other relationship with. They're not a property of a bank account, they are their own thing. The card you describe sounds exactly like a debit card here, and you can treat your Canadian debit card like your French credit card - you pay for things directly from your bank account, assuming the money is in there. In Canada, many small stores take debit but not credit, so do be sure to get a debit card and not only a credit card. Now as to your specific concerns. You aren't going to ""forget to make a wire."" You're going to get a bill - perhaps a paper one, perhaps an email - and it will say ""here is everything you charged on your credit card this month"" along with a date, which will be perhaps 21 days from the statement date, not the date you used the card. Pay the entire balance (not just the minimum payment) by that date and you'll pay no interest. The bill date will be a specific date each month (eg the 23rd) so you can set yourself a reminder to check and pay your bill once a month. Building a credit history has value if you want to borrow a larger amount of money to buy a car or a house, or to start a business. Unlike the US, it doesn't really have an impact on things like getting a job. If you use your card for groceries, you use it enough, no worries. In 5 years it is nice to look back and see ""never paid late; mostly paid the entire amount each month; never went over limit; never went into collections"" and so on. In my experience you can tell they like you because they keep raising your limit without you asking them to. If you want to buy a $2500 item and your credit limit is $1500 you could prepay $1000 onto the credit card and then use it. Or you could tell the vendor you'd rather use your debit card. Or you could pay $1500 on the credit card and then rest with your debit card. Lots of options. In my experience once you get up to that kind of money they'd rather not use a credit card because of the merchant fees they pay." when they make the most money off of charging interest on late payments? This is incorrect. Do you have any data to back this? In the past decade there was a tendency by financial institutions to make money from late payments and there were certain rewards / incentives for people who paid late. However the bubble cracked soon enough and there were huge losses in the card industry. Today most of the revenue for card companies is from margins on customers who pay on time and growth avenues are promoting to pay every transaction by card. why do they actively seek people who pay their bills on time (as evidence by requiring good credit scores to get approved for a card), instead of they opposite? As indicated above. Remember if one customer defaults it wipes out margins made by tons of customers. In spite of giving credit to people with good credit score, the average credit card debit an US individual holds is still quite high. a free $50 looks too good to be true. As others already pointed out, these offers are common to many cards that want you to build loyalty towards a particular company (e.g. airlines cards give lots of mileage for a decent initial spend). Should I get this card for the $50? Why and/or why not? How much do you spend on Amazon, or are planning to do so in future? This offer has been around for ages (earlier they used to offer much smaller amounts of $20 for signing up) and you never saw it. So probably, you won't be really using the site frequently. In that case, its just a matter of whether $50 is worth the hassle for you to sign up and then later cancel (if you don't want to manage another new card). The hit to credit score is likely to be minimal unless you do such offers often. As such, for a person who rarely buys on Amazon I wouldn't advise you to sign up for this card, there are better rewards cards that are not as tied to a particular site (such as Chase Freedom, Discover etc.) If however, you are a regular shopper but just never noticed this prompt earlier; then it is worthwhile to get this - or even consider the Prime version, which you will get or be automatically upgraded to if the account has Prime membership. That gives 5% back instead of 3% on Amazon. If your debit card/ATM card is stolen or lost, someone else might be able to withdraw money from the checking account that it is tied to, or buy things with the card and have the money taken out of the checking account to pay the merchant. Subject to daily withdrawal limits imposed by your bank, a considerable amount of money could be lost in this way. At least in the US,  debit or ATM cards, although they are often branded Mastercard or Visa, do not provide the same level of protection as credit cards for which the liability is limited to $50 until the card is reported as lost or stolen and $0 thereafter.  Note also that the money in your savings account is safe, unless you have chosen an automatic overdraft protection feature that automatically transfers money from your savings account into the checking account to cover overdrafts. So that is another reason to keep most of your money in the savings account and only enough for immediately foreseeable needs in the checking account (and to think carefully before accepting automatic overdraft protection offers). These days, with mobile banking available via smartphones and the like, transferring money yourself from savings to checking account as needed might be a preferred way of doing things on the go (until the smartphone is stolen!) While you're asking about a particular bank, I'll give my opinion of this in general.  I think a $12,000 household income is pretty low to be given credit. The risk to the bank is certainly higher than if the income were at that $35,000 level. They can use this to differentiate what they offer for perks, and if they ever collateralize the debt of these cards, it's a clearly defined demographic. Everyone else seems to have focused (rightly so) on the negatives of credit cards (high interest rates) and why it is important to pay them off before interest starts accruing. Only Marin's answer briefly touched on rewards.  To me, this is the real purpose of credit cards in today's age.  Most good rewards cards can get you anywhere from 1-2% cash back on ALL purchases, and sometimes more on other categories.  Again, assuming you can pay the balance in full each month, and you are good at budgeting money, using a credit card is an easy way to basically discount 1-2% of all of the spending you put on your card.  AGAIN - this only works to your advantage if you pay off the credit card in full; using the above example of 20% interest, that's about 1.6% interest if the interest compounds monthly, which wipes out your return on rewards if you just go one month without paying off the balance. Credit cards are a golden goose for banks, as they get to issue high-interest loans and simultaneously generate alot of fee income. Debit cards aren't quite as good, but they still generate substantial fee income -- ~2% of every credit/non-PIN debit transaction goes to the bank and credit card network. Credit histories exist because they are the most effective tool available to predict whether you will pay back your loans or not. You don't need a credit history to buy most things, you need a credit history to get a large loan. Think of it from perspective of a lender: Credit scoring is the bank's way screening out people who are expensive to do business with. It's objective, doesn't discriminate on the basis of race, sex or other factors, and you have recourse if the rating agencies have incorrect information. I'm an Australian who just got back from a trip to Malaysia for two weeks over the New Year, so this feels a bit like dejavu! I set up a 28 Degrees credit card (my first ever!) because of their low exchange rate and lack of fees on credit card transactions. People say it's the best card for travel and I was ready for it. However, since Malaysia is largely a cash economy (especially in the non-city areas), I found myself mostly just withdrawing money from my credit card and thus getting hit with a cash advance fee ($4) and instant application of the high interest rate (22%) on the money. Since I was there already and had no other alternatives, I made five withdrawals over the two weeks and ended up paying about $21 in fees. Not great! But last time I travelled I had a Commonwealth Bank Travel Money Card (not a great idea), and if I'd used that instead on this trip and given up fees for a higher exchange rate, I would have been charged an extra $60! Presumably my Commonwealth debit card would have been the same. This isn't even including mandatory ATM fees. If I've learned anything from this experience and these envelope calculations I'm doing now, it's these: