Why Didn't I Learn This in School: Credit, Get it?

Credit or debit? That's the big question.

So it's time to get your first, real-life credit card. Those bills aren't just for your parents to worry about anymore.

But don't panic -- we're here to help. We'll go over debit cards vs. credit cards, and good credit vs. bad credit.

The little pieces of plastic in your wallet can have a huge impact on your financial future, so it's crucial to understand what each card means -- and when to use them.

SEE MORE: Best cash back credit cards for holiday shopping

Let's start with debit.

A swipe of your debit card deducts money straight from your bank account.

Use your debit card to withdraw cash from the ATM, and for smaller purchases like your morning iced coffee or that salad you want for lunch.

Now let's dive into credit.

Credit cards allow you to use the bank's money -- not your own. How cool is that?

Well -- there's a catch, of course.

It's way easier to spend lots of cash if the money doesn't feel like yours. Banks capitalize on this concept by charging you interest rate.

Interest rate is the price you pay back the bank for borrowing money.

Take a look at some of the best credit cards available:

The average interest rate for most cards is approximately 13.66%, but the maximum allowed by law is a whopping 29.99%. Yikes.

Let's say you buy a $300 pair of jeans. You could be charged over $40 of interest if you don't pay the initial $300 off -- so it's best to avoid that.

However, there are tons of perks that come from using your credit card, including extended warrantees on large purchases, anti-fraud protection and airline miles.

The big lesson here? Pay off as much -- if not all -- of your bill each month. By doing so, you're not only saving money, but also building credit. Monthly, on-time payments will make your credit go up.

But don't let your card sit on your wallet to avoid getting billed. It's actually good for your credit to keep charging -- as long as you pay it off!

So what does it mean to have good credit?

A good credit score shows the bank you have good credit management, so you're in a better position when you're buying those big-ticket items in the future, like a car or a house.

The big takeaway? Both kinds of accounts have their advantages, but knowing which cards to use -- and when -- can make a huge impact on your financial future.