Difference between credit cards and debit cards

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It is very likely that you have atlast one credit card and one debit card each. They almost look identical having 16 digit card numbers, expiration dates and PIN numbers. But this is all where it is similar. Apart from these, debit cards and credits cards are totally different. In debt cards, you can withdraw money after you have deposited funds at the bank. In the case of credit cards, you purchase items or goods or withdraw money by borrowing money from the card issuer or the bank. You must check onevanilla balance .These are only the basic differences. You can read our article to know more about them.

Debit Cards

Debit cards didn’t have any fees associated with them only if you manage to spend the balance in your account only. If you happen to spend more, then you need to pay an overdraft fee. However, this does not apply to prepaid debit cards as they charge frequently for the activation, usage and holding fees. On the other hand, credit cards charge annual fees, late-payment fees, over-limit fees and many other penalties on top of the monthly interest on the outstanding balance on your card. A debit card allows the user to withdraw the money which he already has in his/her account, therefore preventing any chances of going into debt. If you are an impulsive spender, then debit cards are better as you can avoid the temptation of credit as you will have a limit to your spending unless you decide to load your card as well.

Credit Cards

Using a credit card on a regular basis can reap youcashback offers, discounts and travel points which are unavailable in case of debit cards. If you pay your cards fully and regularly everytime, you can profit through the various loyalty programs of the credit cards which offers rewards on monthly purchases and bills payment. The credit card also reflects a consumer credit report, which can be raised through expenditures and payments timely.  Credit cards in some cases, provide additional warranties or insurance for the items which you have purchased, on top of the warranties provided by the retailer or brand. Sometimes, when an item which you bought using your credit card turns defective after the warranty period of the brand, you can contact with the credit card to check if they will provide coverage.

Credit cards also provide better protection than debit cards in cases of lost or stolen. If you report the loss or theft within a quick time, your maximum liability would be very less. The more time youtake to report your loss, the more the liability will increase. In many cases like renting a car, you could get a waiver for collisions. Most car rental agencies trust credit cards rather than debit cards. So, if you are looking to rent a car, a credit card is good for you.


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Credit cards and debit cards, both have their pros and cons. You need to figure out the ways in which you would spend your money and then choose the cards accordingly.

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