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

Edited by Huma Saeed || By Sara Rehman || 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.
Sara Rehman
Dec 10, 2014
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.
Sara Rehman
Dec 10, 2014
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
Sara Rehman
Dec 10, 2014
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.
Sara Rehman
Dec 10, 2014
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.
Harlon Moss
Dec 10, 2014
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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.
Huma Saeed
Dec 10, 2014
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.
Huma Saeed
Dec 10, 2014
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.
Sara Rehman
Dec 10, 2014

Comparison Chart

Source of Funds

Directly from bank account
Borrowed from the credit card issuer
Huma Saeed
Nov 10, 2023

Repayment & Interest

Immediate, no interest
Billed later, interest applicable if not paid
Sara Rehman
Nov 10, 2023
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Credit Score Impact

None
Can improve or harm, based on usage
Sara Rehman
Nov 10, 2023

Security & Liability

Less robust, higher liability for fraud
Stronger protections, lower fraud liability
Harlon Moss
Nov 10, 2023

Rewards & Benefits

Generally none
Often includes rewards, travel benefits, etc.
Harlon Moss
Nov 10, 2023

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.
Sara Rehman
Nov 10, 2023

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.
Sara Rehman
Nov 10, 2023

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.
Huma Saeed
Nov 10, 2023

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.
Sara Rehman
Nov 10, 2023

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.
Sara Rehman
Nov 10, 2023

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.
Sara Rehman
Nov 10, 2023

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.
Sara Rehman
Nov 10, 2023

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.
Huma Saeed
Nov 10, 2023

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.
Harlon Moss
Nov 10, 2023

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.
Aimie Carlson
Nov 10, 2023

FAQs

What's the risk of debit card fraud?

Higher compared to credit cards, with potential direct bank account access.
Sara Rehman
Nov 10, 2023

What is a debit card?

A card linked to your bank account for direct payments.
Sara Rehman
Nov 10, 2023

Do credit cards offer rewards?

Many do, like cashback or travel points.
Janet White
Nov 10, 2023

Can a credit card improve my credit score?

Yes, if used responsibly and bills are paid on time.
Sara Rehman
Nov 10, 2023

Is a PIN needed for a debit card?

Yes, for most transactions and ATM withdrawals.
Aimie Carlson
Nov 10, 2023

How does a debit card affect my credit score?

It doesn't; debit card use isn't reported to credit bureaus.
Sara Rehman
Nov 10, 2023

Can I use a debit card abroad?

Yes, but be mindful of foreign transaction fees.
Janet White
Nov 10, 2023

What happens if I miss a credit card payment?

You'll incur late fees and potentially damage your credit score.
Aimie Carlson
Nov 10, 2023

Do debit cards have spending limits?

Yes, usually tied to the account balance or set daily limits.
Sara Rehman
Nov 10, 2023

What is a credit card?

A card allowing you to borrow funds up to a set limit.
Huma Saeed
Nov 10, 2023

Are debit card transactions immediate?

Yes, they directly deduct funds from your bank account.
Sara Rehman
Nov 10, 2023

Do credit cards charge interest?

Yes, on balances carried beyond the payment due date.
Sara Rehman
Nov 10, 2023

Should I pay off my credit card in full?

Yes, to avoid interest and build a good credit history.
Aimie Carlson
Nov 10, 2023

How do I build credit without a credit card?

Through loans or other credit products, but not with a debit card.
Aimie Carlson
Nov 10, 2023

Can I overdraft with a debit card?

Yes, if you opt into overdraft protection, often with fees.
Harlon Moss
Nov 10, 2023

Are credit cards safer for online shopping?

Generally, yes, due to better fraud protection.
Sara Rehman
Nov 10, 2023

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

Regularly monitor your account and spend within your means.
Harlon Moss
Nov 10, 2023

Are there annual fees for credit cards?

Some cards have them, but many do not.
Sara Rehman
Nov 10, 2023

Is there an age requirement for a debit card?

Typically, you must be at least 18 or have a co-signer.
Janet White
Nov 10, 2023

Can I get a credit card with bad credit?

Yes, though options may be limited, like secured credit cards.
Sara Rehman
Nov 10, 2023
About Author
Written by
Sara Rehman
Sara Rehman is a seasoned writer and editor with extensive experience at Difference Wiki. Holding a Master's degree in Information Technology, she combines her academic prowess with her passion for writing to deliver insightful and well-researched content.
Edited by
Huma Saeed
Huma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.

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