What are the 12 difference between credit card and debit card?

In this technologically advanced era of the digital economy, the use of plastic money is being promoted by every govt. So the difference between Credit Card and Debit card become a million-dollar question. As both these cards are the prime forces behind boosting the digital imprint of any nation in the digital sector and its economy. Both these cards have their advantages and disadvantages which we as customers must know.

difference between credit card and debit card

For someone, credit cards may be beneficial while for somebody else Debit cards may be useful which depends on purchasing power, modes of payment, etc. So no one can tell you which card is best for you. But to make your selection simple, we will discuss the differences between credit and debit cards :

Debit Card

A Debit card is a simpler form of plastic money that is already discussed in another dedicated blog over Debit cards and you can visit that blog to read in detail. In this blog, we will restrict our discussion to the difference between credit cards and debit cards only. A Debit card is issued by any bank against a savings or current account in your name. To have a Debit Card you must have a bank account and as the debit card is directly linked to your account so the money will be deducted directly and instantly from the account.

The latest Debit cards issued by institutions have some features like credit cards and can be used in place of credit cards at selected places and for selected purposes. So you can not spot any differences between credit and debit cards in those cases, so you have to be vigilant and sure enough about the function of the card you are using.

Credit Card

A credit card is another popular way to use plastic money and there is no necessity to have a bank account for credit card holding. But you must have a backup tool against which a credit card can be issued by a company like a Fixed Deposit or regular payments being made to account as in the case of salary. The credit card comes with a credit limit, which depends on the customer’s purchasing power, credit history, and many other factors.

Both cards prevent us from the utility of carrying hard cash in our pockets while going shopping. As both these cards may have the same look in terms of the company logo, details on the card, etc but both differ from each other in terms of their functionality. Let’s tabulate the difference between credit card and debit card┬áto make it simple for you:

12 Differenc between Credit Card and Debit card :

Linked to your Savings/Current bank account. No need to have a Bank Account.
The amount spent on purchasing will directly be debited from your bank account. The amount will take on the credit from the issuer for a period of time.
It can be used as a Credit card for selected laces and purposes. It can also be used to withdraw cash but it is not recommended because of heavy charges.
No hidden other charges except joining fees which are also in rare cases. Credit Card has many charges like Joining fees, late payment fees, annual fees, and many more.
You can not spend more than the money you have in your account with exception of overdraft facility holder. A credit card can not be used above the amount of the credit limit of the card.
Transactions through Debit cards have no impact on your credit history. Credit card transactions impact your credit history.
These are prone to online fraud. Comparatively less prone to online fraud.
Getting a Debit card is easy. Approval for a credit card is a long process.
There are very few or no rewards attached to online payment through it Credit cards have lucrative rewards and cashback systems for customers on online payments.
There is no interest in any facility of the Debit Card. Credit cards levy heavy interest for late payments, cash withdrawals, and others.
The amount spent on purchasing will be debited from the bank account instantly. Credit cards have a billing period window of 30-45 days to pay the bills of cards later after purchase.
As the account gets debited instantly so you will not be in debt. Credit card operates under the debt by issuing institutions so it is not debt-free.
If the credit card bill is not paid within the billing period, then heavy charges will be levied on the amount that may rise to 24% sometimes.


How to choose between Credit Card and Debit Card

You can compare the differences between credit and debit cards and accordingly, can procure the card which suits you best. Then also here are some guidelines to provide you with some insight into how to choose among these cards:

credit card and debit card

Cash Requirement

If you are using hard cash frequently to make payments to the vendors then it is advisable to go for a Debit card and not a Credit card. because the Debit card has no interest over cash withdrawal as ATM while a Credit card has.

Financial Discipline

If you are financially disciplined and you have a habit of making bill payments timely then you should go for a Credit Card. Because late payment of bills in the case of a Credit card can attract large interest up to 36% of the bills. If you have a habit of skipping bill payments then the Debit card is best as money is debited from the account immediately and you can not spend more than the money in your account.

Type of Shopping

If you enjoy shopping in malls and outlets and not online shopping then you should go for a Debit card. But if you like online shopping more through e-commerce portals then you can choose a credit card as credit card offers lucrative reward programs for online shoppers.


If you are the type of person who is obsessed with shopping, then you should choose a Debit card because it will not allow you to spend more than the money you have in your bank. This will save you from creating unnecessary debt in the future which may be there in the case of using Credit cards.

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Final Words:

At the last, what matters most is how you handle your finances, because if you know how to manage your personal finances then it is less significant for you to go for the differences between credit and debit cards. Individuals having better control of their finances are using both cards simultaneously while topping up their accounts with rewards and advantage of both cards by selecting the best card for the purpose.

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