Differences Between Debit and Credit Cards


Nowadays, more and more banks are trying to make value addition to the services they provide to their customers. The introduction of credit cards and debit cards in the form of magnetic stripe based cards is considered to be the turning point in the banking industry. Nowadays debit cards and credit cards are mostly chip-based cards which make use of the information stored on it for safeguarding the transactions of the users. Debit cards and credit cards have made banking related transactions much easier, extremely convenient and very secure for the users of the same. If one carries a debit card or a credit card, he/she needs to carry less cash with him her.



Debit cards are the digitized versions of checkbooks. The debit cards are linked to the user’s bank account ( usually checking account)  and the money is debited (withdrawn) from the same account as soon as any transaction takes place. A debit card user will have to use his/her PIN while using his/her debit card at stores or ATMs. However, one can also use his/her debit card without using the PIN at most vendors. In such occasions, he/she will just have to sign the receipts like one does in the case of making payment with his/her credit card.



A credit card is referred to the card that allows the user to borrow money in small amounts at local vendors. One can use the card in order to execute his/her basic transactions. One cannot use his/her credit card to withdraw money from his/her bank account but only can use the same for making payments for any offline or online transactions. The credit card company or the credit card issuer charges the user interest on his/her purchases, though usually a grace period is allowed before interest is charged if card holder does not carry over his/her balance from one month to another. Credit cards are a bit different from the debit cards. They offer credit facility (i.e., loan) which is interest-free if the user pays the monthly credit card bill on time. Unlike that of debit cards, the credit cards are not connected to the personal bank accounts of the users. The credit cards are connected to the banks or financial institutions that issue such cards. Therefore, when one makes a payment using his/her credit card, the issuer pays the vendor and the user goes into debt to the issuer of the credit card.



The differences between debit cards and credit cards are listed below.

infographic credit debit card

Image source: itsallaboutmoney.com



Even today, the debate over which is safer for using, credit card or debit card, still continues. One can see that there are a lot of nice arguments on both in favor of and against the same. One needs to decide about which one he/she should go for, maybe even on a case-by-case basis. This is to remember that one don’t have to pick up just one of the cards to use on an exclusive basis. One has to make choice of which benefits are most attractive to him/her, and which drawbacks are more relevant to his/her personal financial condition.



















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About the author

Rajarshi Bose

I am scorpion by birth, very passionate about art, quite humorous by nature, accounting & finance student, financial trader by hobby and last but not the least, lover of sports.

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