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Credit Card vs Debit Card

Credit Card Vs Debit Card

Managing your finances is so incredibly important, yet it is something that a lot of young people know very little about. Managing your money isn’t something that is often taught in school, and this is partly what leads individuals to make poor financial decisions. To ensure that you manage your money responsibly, there are all sorts of things that you need to know.

From how to pay your taxes to how credit works, these are pieces of information that can really help you make good financial decisions. In this guide we’ll be taking a look at a credit card vs debit card to help you understand which is the best for you financially. So, if you want to find out more, keep on reading!

At A Glance

If you are simply looking for a super quick overview of the difference between a credit card and a debit card, look no further than this “at a glance” section. It will tell you a very brief overview of what you need to know about credit cards vs debit cards.

  • Credit cards are a line of credit that is extended by a bank or credit provider. When you use a credit card, you are not spending your own money, instead you are spending money that you have borrowed from the bank/credit provider. Any money that you have spent on your credit card will be repaid with interest added in monthly repayments. Failure to make these repayments on time could damage your credit score.
  • Debit cards are cards which are connected to your own bank account. When you use a debit card, you are using your own money that is held within your bank account. Unless you have an overdraft, the only money that you will spend in your debit card is money that you already own, so it will not affect your credit report.
Credit CardsDebit Cards
Costs and FeesYou will be charged interest upon any money that you spend using your credit card. Depending on the type of credit card, you may also need to pay fees. Generally do not come with any costs, unless you are paying for a “premium” debit card, or using an overdraft.
Limits on SpendingThe credit card will come with a maximum amount that you can spend based on your credit card.Your spending is restricted to the amount of money that you have in your bank account (unless using an overdraft). 
AccessibilityAccess will depend on your credit history. However, most people will be able to get a credit card as long as you are happy to pay higher interest/fees.Debit cards are generally accessible to everybody.
Places You Can Use ThemGenerally you will be able to use your credit card online, for transactions and to withdraw money from an ATM.Debit cards can typically be used for online spending, phone purchases, manual transactions and cash withdrawals. 
DesignRectangular shape cards displaying your card details, a chip for any transactions and decorated differently depending on credit provider.Rectangular shape providing card details, a chip for transactions. Generally different colors depending on your bank. 
Where the Money Comes FromCredit cards are attached to a line of credit, so you will need to repay the money that you owe. Debit cards are connected to your bank account, so any money that you spend is your own.

The Even Part Of The Playing Field

Let’s kick this off by looking at the things that aren’t actually that different between debit and credit cards. So, if you are choosing between the two, none of these things will be the deal-breaker for you:

  • Both Have Limits – Both credit cards and debit cards have credit limits. Credit cards will have a pre-approved limit that is allocated when you take out a credit card. Debit cards will also have a limit, and that limit will be the amount of money that is in your bank account. If you have an overdraft, then the overdraft limit will become the limit of your debit card.
  • You Can Withdraw Money From an ATM – Both credit and debit cards allow you to withdraw money from the account via an ATM, giving you instant access to the money that is stored within your bank account.
  • Use Your Card Online – Both credit and debit cards can also be used quickly, safely and securely to complete online transactions.
  • They Look Similar – Credit and Debit cards tend to look incredibly similar to one another. They both tend to be rectangular cards that come with a chip that is scanned when the card is inserted into a card reader, and card details that can be used for online/phone purchases.
  • Easily Accessible – Both debit and credit cards are fairly easy to access. There are a huge number of traditional and online banks, as well as a large number of credit providers that offer debit and credit cards. There are also a range of different debit and credit cards, giving you a good chance of being accepted for one of these cards.

What Are Credit Cards? Pros, Cons, And Details

First up, let’s talk about credit cards in a little more detail. As the name suggests, credit cards are a type of bank card that is attached to a line of credit. Credit cards allow you to borrow money from a bank or credit provider to pay for goods and services. This credit is extended to you with the promise that you will repay all the money that you owe, with interest added on top.

In order to get a credit card, you will need to apply for one with either a credit card provider or a traditional bank. Before you will be approved for a credit card, a credit check will be run on your credit history, and information about your finances will be obtained. This allows the credit card provider to set credit limits for you based on your ability to repay the money.

There are two types of credit card: unsecured and secured credit cards. Unsecured credit cards tend to have lower interest rates, fewer fees, and no upfront payment. Whereas secured credit cards require you to put collateral down before you can open the account.

Generally speaking, secured credit cards tend to be used by those who have a bad credit history or those who are incredibly conscious about damaging their credit report. Both secured and unsecured credit cards will impact your credit score.

As long as you are making your repayments on time, then generally using a credit card will have a good effect on your credit score. However, if you miss payments, using a credit card could actually damage your credit score. Now let’s take a look at some of the pros and cons of credit cards.


  • Spread the Cost of a Purchase – Credit cards can be incredibly useful for large purchases as you can spread the cost of the purchase across multiple re-payments.
  • Credit Card Protection – Credit cards tend to protect your purchases in a way that debit cards cannot. It is easy to get money back for purchases where products have not been delivered when using credit cards, and this is a big appeal of this type of card.
  • Rewards – A number of credit cards come with rewards. These might include things such as cashback, points, and discounts.


  • Interest – You will end up paying more than the purchase price for anything you purchase using your credit card due to the interest that is added.
  • Accumulating Debt – Credit cards are normalized, so it is easy to forget that they are actually a form of debt. This debt could really damage your credit report if you fail to make your repayments.

What Are Debit Cards? Pros, Cons, And Details

Now, let’s take a look at debit cards. Debit cards are very different from credit cards. A debit card, also known as a check card or bank card, is a payment card that can be used instead of cash when making purchases. The debit card is attached to your checking account, and when it is used, money is taken from your checking account to cover the cost of the purchase.

Debit cards look incredibly similar to credit cards, but they are incredibly different as they allow you to use your own money. Instead of borrowing money and then repaying it, debit cards allow you to pay for products with money you already have, without having to remove money from your checking account like you would have in the past.

As well as being able to make purchases using your debit card, you will be able to withdraw money from your checking account using your debit card at an ATM. Unless you have a pre-approved overdraft, debit cards will not come with fees and they will not get you into debt. They are simply a way of using money that you already own to purchase things.


  • Every Purchase is Essentially a Cash Purchase – Even though you are not paying with physical cash, debit cards allow you to buy things with money you already own.
  • Poor Credit Doesn’t Matter – Generally speaking, your credit report will not impact your ability to get a debit card. As long as the bank allows you to apply, you should be able to get this card.
  • Safer – You are much less likely to lose a debit card than you are physical cash, and this is a big part of the reason why debit cards have become so popular.


  • Fewer Perks – Debit cards generally do not come with the perks that credit cards have.

Frequently Asked Questions

Which Is More Useful Debit Or Credit Card?

In terms of using your card, there really isn’t much of a difference when it comes to comparing the usefulness of a debit card vs a credit card. Both cards can be used to make payments in traditional stores and online stores, so they are both just as useful as one another.

Can A Credit Card Be Used In An ATM?

Yes, a credit card can be used in an ATM just like a debit car can. Both of these cards can be used to withdraw cash from an ATM that can then be used to purchase things.

Is It Safer To Use A Debit Card Or Credit Card?

Debit cards are safer to use in terms of protecting your credit score. However, a lot of credit cards do come with fraud protection which can protect your purchases, while debit cards do not.

Credit Card Vs Debit Card: The Bottom Line

As you can see in this guide, credit cards and debit cards are very different from one another. It is easy to compare the two, but they are essentially different products, and because of this, you will often find yourself looking at credit cards and debit cards at different points in your life.

If you have your own money, and you are simply searching for a card that allows you to spend money from your checking account without having to pay cash, then you should get a debit card.

In contrast, if you need a line of credit to help with large purchases, emergency funds, or simply to take advantage of perks, then a credit card will be the better option for you! We have discussed both of these types of cards in detail in the guide above. So if you want to find out more, check out the guide above.