The difference between a debit card and a credit card is where the cards pull the money when a purchase is made. A debit card holder can use his/her card to make purchases, provided he/she has funds available in the account while a credit card is offered to those who fulfil various eligibility criteria. A separate credit card account is opened in which the credit limit specified by the lender is available.
Understanding the difference allows you to make wise financial decisions.

DEBIT CARD

Debit cards can be used at ATM machines to withdraw funds that are already available to you. The money will be debited from your savings/current account in real time. If you do not have sufficient funds in your account at the time of making a purchase using your debit card, the transaction will not go through except the account is linked to an overdraft account.

CREDIT CARD

You will have to make a monthly payment at the end of your credit card billing cycle, where you will be required to make a payment towards your outstanding amount. Financial institutions look at your credit score before approving a loan or a credit card, as the score is used to judge whether or not you will be able to repay the loan or outstanding amount on your credit card.


Credit card is the loan that the bank provides you at the time of making a purchase.

Below are the differences between a debit card and a credit card.

Debit card: This takes money directly from your account when you buy something via POS or make withdrawals using the ATM.

Credit card: Only credit available in the credit card account can be used to make transaction.

Debit card: Repayment of fund is not required.

Credit card: Repayment of outstanding fund is required.

Debit card: Don’t have access to overdraft

Credit card: Overdraft facility is available. However, an overlimit fee is chargeable.

Debit card: Charges include processing fee, annual fee, etc.

Credit card: Charges include processing fee, annual fee, late payment fee, prepayment penalty etc.

Debit card: A savings/current account holder can can request for a debit card without fulfilling any lenders eligibility criteria.

Credit card: In order to get a credit card, the customer must fulfill the lender’s eligibility criteria.

Debit card: Transactions made on a debit card does not affect an individual’s credit history.

Credit card: Transactions made on the credit card is reflected on an individual’s credit history.

Debit card: This can be used anywhere, but requires access to real-time funds.

Credit card: This can be used anywhere and function like mini-loans.


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