Conceptually you can think of Tor as a bunch of VPNs where you can set rules as to how the Tor nodes are chained together to transport your traffic from your computer to the final web site you want to visit. When your browser talks (sends IP packets) to a VPN or Tor, it encrypts those packets. You can think of a normal unencrypted packet as a postcard where anyone passing it along (your ISP or a man-in-the-middle hacker) can read the contents (your queries or web pages you see), while an encrypted packet (including HTTPS packets) are surrounded as though inside an envelope; even though everyone can see the sending and receiving IP addresses, only you and the addressee know the encrypted contents.
Below see what happens to your packets depending on if you use a VPN, Tor, or a combination of the two. I'm not going to complicate the explanation below (much) by how the communication channel is set up; just how your privacy is impacted by using different methods.
When not using Tor, VPN or HTTPS (regular surfing to non-secure HTTP sites):
-Your browser sends non-encrypted readable by everyone packets across the internet. Everyone who passes those packets along can see all information you send, what your IP address is, and what pages you look at.
When not using a VPN or Tor, but only visiting HTTPS web sites:
-Your browser encrypts your packets for the HTTPS site you are visiting
-Your ISP (or any man-in-the-middle) knows what web sites you visit, but doesn't see actual pages or info you send them.
-The web site you visit knows what pages are sent, your IP address (and ISP) and any info you send them
-If the web site places cookies on your computer, they can link all pages on their site that your computer visits.
When using a VPN or only one Tor node:
-Your browser encrypts packets for the web site and then encrypts them again for the VPN/Tor (two envelopes, one inside another).
-Your ISP sees only that all your packets go to the VPN/Tor (they can measure amount of traffic)
-Your VPN/Tor now knows pretty much what your ISP knew pre-VPN; where you surf, but not what (unless using HTTP instead of HTTPS).
-The web site you visit doesn't know your IP address; they see the address of your VPN.
-If the web site places cookies on your computer, they can link all pages on their site that your computer visits, but unless you give them payment or other personal information, they don't know who you are. If cookies are used and you ever give them personal info, they will link it to your cookie which links all pages you visit.
When using two Tor nodes or a VPN and a Tor node:
-Your browser encrypts packets multiple times; The outermost envelope is for the entry/first node, the next inside is for the next node, and so on until the innermost packet which is the HTTPS encryption that the web site opens.
-Your ISP sees only that all your packets go to the VPN/Tor entry node (whatever is first) and can measure traffic.
-The Tor entry node (or VPN, if first) sees your ISP/IP address, knows the next node IP and can measure traffic.
-The Tor exit node (or VPN if last) sees the prior node IP and knows where the web pages you look at are but not contents.
-The web site you visit knows that its pages are sent to your exit node/VPN.
-If the web site places cookies on your computer, they can link all pages on their site that your computer visits, but unless you give them payment or other personal information, they don't know who you are. If cookies are used and you ever give them personal info, they will link it to your cookie which links all pages you visit.
Adding many more nodes:
Adding more nodes or VPNs to any communication link is only important if you think that one or more of the nodes are either compromised or cooperating with each other to leak your information. If both the entry node and exit node in a two node Tor system were run by the same organization, it would have the information as though the two nodes were one Tor node (or like a VPN). Tor works best if the nodes are independent of each other so they can't conspire to add their information together.
My final answer to your question:
As long as you only visit HTTPS web sites, your packet contents are already encrypted (privacy). The exit node (either VPN or last Tor node) can't look into packet contents and see passwords or encryption keys.
Using a VPN or Tor is usually done to obscure which web sites you visit (anonymity) from any one group. How anonymous you are depends on how many Tor or VPN nodes you select have been compromised. If some nodes are compromised but others are not, using more nodes (or VPNs) is more secure if some of those additional nodes are also non-compromised.
Anonymity is accomplished by obscuring the metadata of your packets (sending and final IP locations) from any group. Adding more (non-compromised) nodes tends to obscure your metadata better, since the metadata visible to any node is limited to their part of the link.
As for the difference between a Tor node and a VPN service; VPNs usually give better throughput/performance at the cost of paying them money. If you pay the VPN using a credit card (rather than an anonymous payment like Bit-Coin) that will give your personal info to the VPN. Tor nodes are free, usually slower than VPN services, and you don't have a clue as to who is running them.
If you are a non-expert, using either a VPN or Tor alone is easier than trying to get them to work together on your computer.
