The difference between a Debit and a Credit card is one of the most asked questions today. This facilitated by their similarities. For starters, both cards have a similar appearance, you are going to find the manufacturers’ logo body crested on the surface, like the ATM cards you are used to. You will find brandings like Mastercards, Visa, Verve on them.  Both cards are also accepted in many of the same places. Their main purpose is to eliminate the stress of carrying cash around, it essentially promotes a cashless policy.

Understanding the Difference Between a Debit and Credit Card

Their differences are actually straight forward. Debit cards source funds directly from your bank account, while credit card pulls funds from a special line of credit, of which the owner is billed till a later date. A credit card features a specified amount of credit connected to it. If a consumer attempts to spend beyond the credit limit, the transaction will be denied.

What Is a Debit Card

Debit cards generally are cards that offer convenience to their holders. It lets users maintain a cashless policy. You are able to make payments for goods and services, without carrying physical cash. Debit cards are linked to the owner’s account. Funds are instantly removed from your account upon purchase. Debit cards are able to carry out this function, by placing a hold on the amount of purchase.

When you make use Debit cards to make purchases, the bank places hold on the amount spent. Depending on the purchase amount and your bank, the money will either go immediately out of your account or be held by the bank for 24 hours or longer.

Debit cards generally are secured using unique Pins, these pins are requested one’s payments are initiated.

  • A debit card is tied directly to your checking account.
  • It can be used where a credit card can be used.
  • Generally, you will use your PIN to complete the transactions.

What Is a Credit Card

Similar to Debit cards, Credit cards are also used to purchase items, without physically dropping cash. They are swiped in POS, used in ATMs to send cash or used to pay bills online with a secure payment system.

Where Credit cards begin to display discrepancy, is the fact that Credit cards allow users to borrow money against a line of credit. hence it names ” Credit card”. This line of credit can also be referred to as Card’s Credit limit. Card’s Credit limit defines the maximum amount you can borrow.

When using Credit cards, you are charged interest on purchases, No interest is charged if you do not carry your balance over from month to month. Please be aware that Credit cards have high interest rates.

  • A credit card is a line of credit you can access with your card.
  • Generally, you must sign on these purchases (exceptions may be at the gas pump or for small amounts at a drive-through window).
  • You will pay interest on the purchases made if not paid off in 30 days.

 Debit Card Or Credit Card – Which is Better?

Debit Card or Credit Card, which is better? – is one of the most discussed topics, amongst concerned folks. Both cards facilitate cashless policy and can be used to make a purchase, without physically exchanging cash. However, most people prefer one over the other. Which of them is better, is actually a function of the one that best suits your style.

If you have problems with spending, you advised to go for Debit cards, instead of Credit cards, this way, you are able to put a meter on your spending. With Debit Cards, you are only able to spend what is in your account. This way you will be able to avoid excessive Credit card debt.

Please note that some Car rental agencies and hotels require you use a credit card instead of a debit card, This way they are able to seamlessly charge you for damages made, without having the funds in your account as a constraint.

With this piece of information delivered to you in this article on the difference between a credit card and a debit card, I am convinced that you have fully understood the difference between both cards. If you have any other questions concerning these cards, feel free to drop them in the comment section below.


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