Credit Card Vs. Debit Card: What’s The Difference?

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Not sure which one to choose between, debit cards and credit cards? It’s easy to make a decision by knowing what your priorities are. In many locations, both credit cards and debit cards are accepted at the payment gateway. They even look alike.

The primary debit card and credit card difference account is their withdrawal process. A credit card charges you additional fees for it, while a debit card deducts money from your savings account.

What Exactly Is a Credit Card?

A credit card lets you borrow funds against a credit limit. You can use it to make simple purchases, and the same will appear on your monthly credit card statement. Some banks, such as Kotak Mahindra, offer a credit card free of cost with which you can start your credit journey.

What Exactly Is a Debit Card?

A debit card is directly linked to your checking account rather than a line of credit. It means you’re not borrowing any money from a bank.  

Credit vs Debit: What They Mean

There are some significant distinctions between the two plastic payment cards, even though credit and debit cards may appear fairly identical on the exterior. While credit cards enable you to borrow money from the card issuer that must be repaid, debit cards allow you to withdraw funds directly from your bank account.

Since your spending is restricted to the funds in your checking account, debit cards make it harder to overspend.

Using a credit card, you’ll risk going over your budget. Simply because you have a certain credit limit does not mean you can afford that spending every month.

Debit cards provide the same convenience as credit cards, the slight difference is there are no fees or interest on your purchases. A Debit Card is an excellent way to manage finances and help you spend within your budget.

However, a free credit card doesn’t require upfront fees and provides extra insurance on transactions to provide ease of refund or return requests.  

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Debit Cards


  • You are not in debt because you are utilising your own money.
  • It is less expensive to use because no interest charges are involved.
  • Can be used as an ATM card, enabling cash withdrawals from machines.
  • Debit card approval is quicker and simpler.


  • Because money is debited straight from your account, you cannot leave the account below a minimum balance.
  • If you don’t keep count of your spending, it may be challenging to balance your passbook at the end of the month.
  • If you use an ATM from a different bank to withdraw money, you can be charged a fee.
  • In terms of preventing debit card fraud, there is very little protection.
  • And these cards don’t aid in establishing a credit history.

Credit Cards


  • Credit cards are very practical since they eliminate the need to carry cash.
  • Credit cards assist in increasing your credit score.
  • Compared to debit cards, you receive substantially higher benefits.
  • Because they have relatively high credit limits, they give you options for spending.


  • You will be charged a high-interest rate on your due payments 
  • Credit cards charge various fees, but there are credit card free variants as well for which banks don’t charge joining fees.
  • Missing a payment (even for valid reasons) may negatively impact your credit score. To construct it, you must then work much harder.
  • Even though you have a credit limit, you could still feel pressure to go over it. Debt occurs as a result of this.

Choosing the Most Appropriate Card for the Situation

Being truthful with yourself and your capacity to manage credit is important when deciding whether to use a debit or credit card.

To avoid accruing credit card debt if you have spending problems, it is preferable to utilise your debit card whenever possible.

The purchase will also influence which card is better to use. Some hotels and rental vehicle companies make paying with a debit card difficult or hard. Non-airport sites, for instance, could need utility bills, references from people you know, pay stubs, or other documentation before they accept your reservation. Using a credit card can be less of a hassle for you.

Additionally, you can get a credit card free variant for yourself and can benefit from its reward program. However, this arrangement only benefits you if you settle the outstanding sum in full each month.

Use your credit card sparingly if you want to raise your credit score. Making purchases and making on-time payments establishes a history of responsible behaviour that is reported to the credit agencies and displayed on your credit report.

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Concluding Remarks

Before deciding whether to use a debit card or a credit card, consider which features, applications, and fees are most significant to you. As there are free credit cards, you can start with them to build your credit score. Just be sure to handle your cards and money wisely and responsibly.


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