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Difference between credit card and debit card

Difference between credit card and debit card

The difference between debit card and credit card equal to that of debit other than credit. Debit means 'to deduct' and therefore when an individual makes use of paper of debt, is deducting money from the bank account linked to the card. The individual can spend that amount of money, which is present in his bank account and no more than that. A debit card like a check, from which money is subtracted from your personal savings / checking account.

Conversely, the credit refers to the money received as a loan from the bank to the customer, which should be repaid, with interest at a later date. Credit history, payment capacity, income and payables are the parameters that determine the amount of credit. When using one credit card, is actually taking out a loan from the issuing bank, which requires repayment and interest.

Comparative chart

Basis for comparison Credit card Debit card
Sense The credit card is issued by a bank or any financial institution to allow the cardholder to purchase goods and services on credit. Payment is made by the bank on behalf of the customer. The debit card issued by a bank to allow its customers to purchase goods and services, the payment of which is made directly through the customer's account linked to the card.
It involves Pay later Pay now
Bank account The bank account is not a prerequisite for issuing a credit card. The bank account is a must for issuing a debit card.
Limit The maximum money withdrawal limit determined based on the credit rating of the holder. The maximum money withdrawal limit will be less than the money in the savings bank account.
Bill The cardholder must pay the credit card bill within 30 days of each month. There is no such invoice, the amount is deducted directly from the customer's account.
Interest Interest is charged when payment is not made to the bank within a specified period of time. No interest charged.

Credit card definition

A credit card is a type of facility that allows its customers to purchase goods and services on credit and payment is made by a third party (financial institution) on its behalf immediately. The customer must pay the credit amount to third parties later. In this regard, each month, the financial institution sends an invoice to the card user for the amount paid on his behalf. Usually the user granted a credit period of 30 days within which he can pay the amount, afterwards, interest is charged at a prescribed rate.

Definition of debit card

A debit card is a type of facility provided by banks to its customers to purchase goods and services against their savings bank account. So every time the transaction takes place, the amount is deducted from the customer's account. Here, the bank charges a nominal amount each month for using the card. It can be used for the purchase of goods, the transfer of funds, Internet banking, deposits, etc. The ATM debit card is also available on the market today and allows you to take advantage of all the ATM card services.

In the same way as a credit card, it also consists of plastic with a magnetic strip that contains all the basic details of the customer.

Key differences between credit card and debit card

  1. For the issuance of the credit card, the bank account is not the requirement of the bank, but in the case of the debit card the customer must have a bank account.
  2. The main difference between credit card and debit card that, in the debit card, the amount is withdrawn from the bank account connected to it, while in the credit card the amount is not withdrawn from the account.
  3. The bank charges interest on the credit card, while no interest is charged on the debit card.
  4. The maximum credit card withdrawal limit depends on the credit rating, while the maximum debit card withdrawal limit depends on the cash balance in the account.
  5. The overdraft rate is low on the credit card, but the overdraft rate is high in the case of a debit card.


  • Made of plastic with a magnetic strip.
  • Issued by a bank or financial institution.
  • It provides basic services such as withdrawals, fund transfers and online payments.
  • Fees are collected for the use of a card.


It is not easy for us to bring a huge amount of cash or a checkbook with us, so credit and debit cards are good structures that help overcome this problem. If you have a sufficient cash balance in your bank account, you can choose the debit card, but if you don't have a bank account and your credit is good enough, then you can choose the credit card. It's up to you, do you decide for yourself? Which card suits you best, according to your needs.