Difference Wiki

Debit Card vs. Credit Card: What's the Difference?

Edited by Aimie Carlson || By Janet White || Updated on November 10, 2023
A debit card withdraws money directly from a bank account, while a credit card allows borrowing up to a certain limit to be repaid later.

Key Differences

Debit Card allows you to make payment from your bank account and withdraw money from your account limited by your pre balance. While in Credit Card, either you withdraw money or make payment you actually borrow the money from bank and become creditor of the bank.
Most issuers do not verify employment record, credit, addresses or even legal residency. Credit Card brings many complexities with it like verification, guarantee of a third party and deposit of some kinds of securities.
You can use as such amount as available in your Debit Card account and sometimes you cannot use Debit Card for payment purpose. While you can use Credit Card as ATM as well as a mode of payment and can make the wide range of transactions specified by bank
By Debit Card, you can withdraw amount by using PIN (Personal Identification Number). You do not need to prove your identity by ID card or signature as in case of cash withdraw from bank counter. While in Credit Card in addition to security code, you have to put your signature on bill to prove your identity.
Normally the transactions made by Debit Card are service free and there are no other charges. In case of Credit Card customer is liable to pay the borrowed amount along with service fee or interest charges.
Often banks do not grant any extra benefit to customers having Debit Card. However, to promote the culture of shopping through Credit Card various reward schemes are available to Credit Card holder.
Having a nil balance in Debit Card account put no effect. However, crossing the Credit Card limits repeatedly and default in making payments on time can make a bad image and results in loss of trust.
Using a Credit Card when using an ATM, to withdraw cash, is more expensive than Debit Card. You have to pay extra amount up to 3% of advance money. Debit Card are free from any service charges in most of the cases.

Comparison Chart

Source of Funds

Directly from bank account
Borrowed from the credit card issuer

Repayment & Interest

Immediate, no interest
Billed later, interest applicable if not paid

Credit Score Impact

Can improve or harm, based on usage

Security & Liability

Less robust, higher liability for fraud
Stronger protections, lower fraud liability

Rewards & Benefits

Generally none
Often includes rewards, travel benefits, etc.

Debit Card and Credit Card Definitions

Debit Card

Debit cards typically require a PIN (Personal Identification Number) for secure transactions.
For safety, the store required entering a PIN when paying with a debit card.

Credit Card

Responsible credit card use can help build a positive credit history and improve credit scores.
By regularly paying her credit card bill on time, she improved her credit score.

Debit Card

A debit card offers the convenience of cashless transactions without the need for credit.
She preferred using her debit card at restaurants to avoid carrying cash.

Credit Card

Credit cards allow users to make purchases or withdraw cash up to a certain limit and pay back the amount with interest.
She bought a new laptop with her credit card and paid it off over a few months.

Debit Card

Debit cards often double as ATM cards, allowing direct access to one's bank funds.
When he needed cash, he used his debit card at the nearest ATM.

Credit Card

Credit card companies often provide rewards, such as cashback or travel points, for purchases made using the card.
Every time he used his credit card at the grocery store, he earned reward points.

Debit Card

A debit card is a payment card that deducts money directly from a consumer’s checking account to pay for a purchase.
I used my debit card to buy groceries, which immediately took money from my checking account.

Credit Card

A credit card is a plastic card issued by a financial institution, granting a line of credit to the cardholder.
He used his credit card to book a hotel room, planning to pay the bill later.

Debit Card

A debit card can be used for both online and in-store purchases, deducting funds immediately from the bank account.
She quickly completed her online purchase using her debit card details.

Credit Card

Credit cards usually offer fraud protection, reducing the cardholder's liability for unauthorized transactions.
After noticing a fraudulent charge, he reported it and was not held liable by his credit card company.


What's the risk of debit card fraud?

Higher compared to credit cards, with potential direct bank account access.

What is a debit card?

A card linked to your bank account for direct payments.

Do credit cards offer rewards?

Many do, like cashback or travel points.

Can a credit card improve my credit score?

Yes, if used responsibly and bills are paid on time.

Is a PIN needed for a debit card?

Yes, for most transactions and ATM withdrawals.

How does a debit card affect my credit score?

It doesn't; debit card use isn't reported to credit bureaus.

Can I use a debit card abroad?

Yes, but be mindful of foreign transaction fees.

What happens if I miss a credit card payment?

You'll incur late fees and potentially damage your credit score.

Do debit cards have spending limits?

Yes, usually tied to the account balance or set daily limits.

What is a credit card?

A card allowing you to borrow funds up to a set limit.

Are debit card transactions immediate?

Yes, they directly deduct funds from your bank account.

Do credit cards charge interest?

Yes, on balances carried beyond the payment due date.

Should I pay off my credit card in full?

Yes, to avoid interest and build a good credit history.

How do I build credit without a credit card?

Through loans or other credit products, but not with a debit card.

Can I overdraft with a debit card?

Yes, if you opt into overdraft protection, often with fees.

Are credit cards safer for online shopping?

Generally, yes, due to better fraud protection.

What's the best way to manage a debit card?

Regularly monitor your account and spend within your means.

Are there annual fees for credit cards?

Some cards have them, but many do not.

Is there an age requirement for a debit card?

Typically, you must be at least 18 or have a co-signer.

Can I get a credit card with bad credit?

Yes, though options may be limited, like secured credit cards.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Aimie Carlson
Aimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.

Trending Comparisons

Popular Comparisons

New Comparisons