Difference Between Debit Card and Credit Card 2021

Overview of difference between debit card and credit card

At the first glance, the debit card and credit card look the same and almost identical in terms of build and design. Both of them have pin security, expiration date, and 16 digit card number. Moreover, they both can be used offline and online for shopping purposes. The prime difference between a debit card and a credit card is, a debit card allows a user to spend money from his own bank account. While the credit card allows a cardholder to borrow money from the card issuer for instant purchases.

While it is necessary to have a certain amount of money to be deposited in your bank account to do shopping or withdraw cash from your debit card. However, there is no such requirement in the case of a credit card. You can always borrow the money for your purchases without having any money in your pocket or bank account. They both are the same only in terms of shape and design but their features are different for which the details have been published below.

Read Also: Transfer money from credit card to bank account

Difference Between Debit Card and Credit Card
Difference Between Debit Card and Credit Card

What is a debit card?

The debit card is generally a plastic card that we used to withdraw cash from ATMs. Nowadays, these are also used as an alternative to cash while making payments on offline stores.

In the case of a debit card, the money you want to use or withdraw will be deducted from your bank account. Even though it is said that credit cards are safer to use, however, current debit cards do have that EMV chip and pin verified protection for extra safety.

Do you know that is some of the countries’ debit cards are also known as check cards or bank cards? Yes, you read it right. Moreover, there are 3 types of debit cards for which we have provided the details below.

Standard Debit Cards

This is a primary version of a debit card in which the amount will directly debit from your bank account.

EBT (Electronic Benefits Transfer) Cards

The EBT Cards are only given to those who qualify to avail the benefits of certain purchases. These cards are issued by state agencies and if you qualify for the EBT card then you might get it within 7 to 10 days.

With EBT cards you can use the benefits on the purchase of food items or for child education. Moreover, you can also swipe your EBT card at ATM to withdraw cash.

Prepaid debit card

A prepaid debit card is a card where you have already loaded the money to use later for your future expenses. This requires no bank account to use and avail of the benefits of a prepaid debit card.

Read Also: Transfer money from ATM to another bank account

Payment Gateways of Debit Card

We all have come across 3 payment gateways of a debit card. These payment networks are RuPay, Visa, and MasterCard. The details of these networks have been mentioned below.

RuPay Debit Card

Rupay debit card is an Indian card that is issued by the National Payments Corporation of India (NPCI) in the year 2012. The prime objective of this card is to restrict the monopoly of VISA and MasterCard.

Moreover, the charges of Rupay debit card are less in comparison to Visa and MasterCard. However, the major downside of the Rupay card is you are not eligible for doing international transactions.

VISA Debit Card

The Visa Card is running under the Global Payment Technology company. It is headquartered in California. These Visa Debit Card are capable of global transactions.

MasterCard Debit Card

The MasterCard is also an international card network that allows cardholders to make hassle-free payments in India and worldwide. Moreover, you will get a high withdrawal limit with MasterCard and Visa Card as compared to Rupay debit card.

Benefits of Visa and MasterCard

The Visa and MasterCard provide the following benefits to the cardholders.

  • MasterCard and Visa card are globally accepted and is eligible for foreign transactions.
  • They provide premium merchant offers that include a wide range of benefits from Indian and international brands.
  • Moreover, Visa and MasterCard ensure smooth payment at POS terminals because they are accepted all over the country.
  • Furthermore, you will also enjoy the complimentary lounge access with Visa and MasterCard.
  • Many of the popular online shopping and entertainment platforms have Visa & MasterCard acceptance. i.e. Amazon, Netflix.

Benefits of RuPay Card

Similarly, the Rupay card has its own benefits and we have published the details below.

  • The bank issues Rupay cards at very nominal charges.
  • Rupay card comes with issue charges as compared to Visa and Mastercard.
  • These days the Rupay card is also working on global acceptance by tie-up with international companies.
  • As per the advisory of Govt. of India, there will be no MDR charges on Rupay Card.
  • Nowadays, some of the Rupay cards also provide lounge access and brand merchant offers.

If you need a credit card quickly, apply for the First Access card and receive a confirmation in 60 seconds.

Read Also: Send Money from Wallet to bank transfer

Pros & Cons of Debit Card

The following are the pros and cons of debit cards.

1. Quick Approval1. You must have some amount in your bank account to use debit card.
2. Eligible for shopping2. Not good in terms of shopping rewards.
3. Reduces the rush in banks for cash withdrawal3. There is a limit on cash withdrawal from ATMs.

So far, we have provided detailed information on debit cards and how they work. Now, you will learn about credit cards and their benefits. This way you will learn the difference between debit card and credit card.

Read Also: Icici Credit Card Cancellation

What is a credit card?

In simple terms, a credit card is a card that allows a cardholder to borrow money for fulfilling his needs and desires. It is not necessary to have cash in your pocket or bank account to make a purchase by using your credit card.

The credit card works like a miracle card as it allows you to buy anything without having any money in your bank account. However, the card issuer, primarily banks, gives you a time period of around 45 days to return back the money along with interest charges.

You will find various kind of credit cards that allows you to enjoy perks and discount on your every purchase. Whenever you purchase anything from your credit card you will get reward points in return.

There are multiple kinds of credit cards available in the financial market. These include travel cards, fuel cards. shopping cards, cashback cards, etc.

Categories of Credit Cards

Credit cards have divided into four categories. All the categories along with their information are published below.

Standard Credit Cards

The standard credit cards provide credit limits to the cardholders for making purchases, cash advances, and avail of the facility of balance transfer as well.

Charge Cards

Charge Cards work almost similar to a credit card but the major difference is you can not carry forward your pending dues to next month. There is no option of minimum payment dues and you have to clear all your monthly dues to use your charge card.

Rewards Card

Those cards that provide miles, travel points, cashback, etc. on your spending and purchases are known as rewards cards.

Secured Credit Card

A secured credit card is a card that is issued against a fixed deposit with the bank. This is also known as card against FD. The bank held a fixed deposit amount as collateral. If you have a bad credit history or you won’t get a credit card due to other reasons then you can go with a secured credit card.

Key Things To Note

There are key things to note when you buy a new credit card. The following points will help you to find the right credit card for you.

  • Make a list of your monthly and annual expenses so that you can choose the right credit card. Let’s say a major portion of your money spends on fuel then you might go for a fuel credit card.
  • Always check the reward points structure of your desired credit card.
  • Do check about the validity of your earned reward points.
  • Do not lure by the offers and rewards while applying for a new credit card.
  • Always analyze the hidden charges of a credit card.

What are the major advantages of a credit card?

The major advantages of a credit card are mentioned below.

Reward Points

Many of you heard about credit card’s high-interest charges but credit card companies also offer reward points and benefits to the cardholders.

The credit card companies offer you the following benefits like reward points, No Cost EMI offer, cashback offers, lounge access at airports.

Furthermore, premium credit cards do provide insurance cover and priority check-in which are the major advantages of a credit card.

Universal Acceptance

Another advantage of credit cards is they are globally accepted and that is not in the case of debit cards sometimes.

Moreover, they help you to transact for any foreign currency. However, this will incur forex markup charges.

Buyer Protection

Nowadays, cybercrime is common in this digital world, and using your credit card almost everywhere must be a safety concern. For the safety of the customer’s credit card companies offers strong buyer protection.

The liability of the customers is on credit card companies as stated by the Reserve Bank of India. Let’s say you order something from a website and didn’t get your order. In that case, the credit card company will raise a dispute against the transaction in order to protect you from fraudulent transactions.

This is known as “ChargeBack” and whenever you apply for a new credit card make sure they provide a ChargeBack feature.

Builds your credit score

As you know that credit score is very important and one of the best ways to build a good credit score is to get a credit card.

One of the biggest advantages of having a credit card is it builds your credit score. The smart way to build up a credit score by using a credit card is to use them for a small amount and pay it immediately within the due time period.

This timely repayment habit will help you to build up a good credit score over the years.

When you have a good credit score you will get a good premium for insurances as well as you can also negotiate the interest rate charges levied on your credit card.

What are the disadvantages of credit card?

As you know credit card allows you to take a quick loan to buy things. However, there might be some major disadvantages of a credit card. This section contains all the details which help you to understand the credit card disadvantages.

Impulse Buying

Many credit cardholders fall into the trap of impulse buying. This means they develop a habit of buying anything without any planning. They just find an attractive offer and click that go to cart option and purchase the unnecessary item.

The primary reason is you don’t have to pay now by using your credit card. This would end up in an unnecessary purchase for which you will have to regret later.

More Debt

Do you know credit cards will put you under the mountain of debt? Yes, this is absolutely correct as the interest charges levied on credit cards are too high.

Let’s understand this concept. A home loan interest is ranging somewhat around 8%, a car loan around 10%, and a personal loan around 12%. But, the interest of a credit card ranging between 24% to 42% per annum. That’s why we have called it a mountain of debt.

Moreover, you have to pay other charges like late payment charges, over-limit charges, GST, etc. You can check out the list of credit card hidden charges here.

Cash Withdrawal Charges

Another way through which credit card companies make money is cash withdrawal charges. If you withdraw cash from ATM by using your credit card then you have to pay interest on the transacted amount.

Hamper your credit score

The credit card also plays a major role in building up a credit score if used wisely and by making payments on time. However, if you develop bad habits of making late payments then you have to face the consequences.

Getting into a habit of impulse buying and then you don’t clear the due amount on time will surely hamper your credit score.

Moreover, if you choose to close your old credit card and then reapply for a new credit card instantly will also impact your credit score negatively.

Important Points Before Applying For A New Credit Card

There are some key points that you have to always remember before applying for a new credit card. Note down the following points in your mind.

  • You always have a mindset of building a credit score rather than spending money from a credit card.
  • Make sure you have set up standing instructions or auto-debit to save you from late payments.
  • Similarly, spend only on those items or products that fall under your purchasing capacity.
  • Moreover, many of the finance experts advised not to have more than 1 or 2 credit cards.
  • Do not close your old credit card because it will put a negative impact on your credit score.
  • It is always advised to do proper research before applying for a new credit card. Check all the hidden charges applied to your desired credit card.
  • Do not skip the terms & conditions page of a credit card. Read them carefully.
  • Don’t just fall for the attractive offers as stated by the card agents or credit card companies.

Is credit cards good or bad?

After explaining all the pros and cons of credit card and their types and categories, the next question arises in your mind is, do credit cards good or bad?

The simple answer to this question is it works well for those who use them in a good way and bad for those who misuse them for unnecessary purchases.

If you possess a credit card and use it smartly then it will build a good credit score for you. Smart use means making timely payments, restrain yourself from the trap of minimum payment due, not buying unnecessary products, etc.

On the other hand, a credit card can be a bad choice if you are indisciplined in making bill payments and spend money on the products that you don’t require.

We hope you get a clear idea from this answer whether a credit card is good or bad.

Credit card and debit card difference

After reading the above section you will get an idea of the major difference between debit card and credit card. Consider the following key points that are given in the table below.

Credit CardDebit Card
1. Credit card will provide you a quick loan to make purchases instantly.1. To make purchases from a debit card you have to first deposit an amount in your bank amount.
2. The credit card offers rewards and offers for every transaction.2. Debit card lacks in offering perks and rewards.
3. Credit card works worldwide.3. Debit card sometimes lacks in foreign transactions.
4. Smart use of credit cards helps to build up a good credit score.4. Debit card transactions have no relation with your credit score.
5. It can cause a bad habit of impulse buying.5. Debit card helps you to make purchases with proper planning.
6. Misuse of credit cards can land you in debt.6. Debit card save you from debt as you can purchase only those items that are under your purchase limit.
7. There is interest levied on your cash withdrawal amount.7. Cash withdrawal from Atm does not incur any interest charges.
8. You have to pay joining and annual fees to maintain a credit card.8. You need not pay joining and annual fees for the recurring usage of a debit card.
9. Credit Card provides better buyer protection.9. Debit cards lack in providing protection against fraud protection.

About The Post

The whole post has been revolved around the difference between debit card and credit card. We have mentioned all the important key points that will help you to identify the usage of credit and debit cards and the key difference between them.

Moreover, we have also mentioned the payment networks and the categories of debit and credit cards in this post. Please tell us your questions or your opinion related to this post in the comment section.

You can also check out Wikipedia for credit card information.


As per our analysis if you make most of the transactions in cash at stores and avoids online shopping, then a debit card is perfect for you.

However, if you frequently shop online and avoids cash for payment then a credit card might be a good option for you. The reason is credit card offers perks and rewards for making transactions.

But, a credit card can land you in debt if not used wisely. Prepare a budget chart and calculate all your expenses first. After then, look for a credit card that provides good rewards against your expenses.

Moreover, to be on the safer side you can take the help of a finance expert.


Is ATM Card a credit card?

No, ATM cards and a credit card are two different cards. However, a credit card can be used at ATMs for cash withdrawal.

What are 3 types of credit cards?

The three types of credit cards are:

  • Standard Credit Card: These are the regular credit card whose credit limit can be used to make purchases as well as for balance transfer.
  • Charge Cards: These cards are similar to standard credit cards but they don’t have a minimum payment due option. You have to clear the total outstanding to use them from the next month.
  • Secured Credit Card: These credit cards are issued against a fixed deposit. It is issued to those who have a bad past credit history.

What is CVV number in ATM card?

CVV number whose full form is Card Verification Value is located on the white strip that is present on the back portion of your ATM or debit card. This works as a safety feature to complete the transaction online.

How do beginners use credit cards?

Beginners need to keep the following points in their mind while using credit cards.

  1. Prepare their monthly or annual budget.
  2. Do not lure by the attractive offers.
  3. Plan your purchases and expenses.
  4. Spend for those products only that come under their purchase limit.
  5. Don’t forget to use perks and rewards.
  6. Have a mindset of building a credit score.
  7. Do not take your credit card for granted.
  8. Set up auto-debit feature.
  9. Make timely payments of your dues.
  10. Never ever use your full credit limit.

Why are debit cards bad?

The debit cards are bad due to the following reasons.

  • It fails to provide good rewards and cashback on transactions.
  • Not works well in most foreign countries.
  • Not much good in terms of buyer protection.
  • It won’t build your credit score.

Disclaimer: All the information published here are for informational and educational purposes only. Moreover, all these information are researched from official sources. However, we will not warranty the information to be accurate and completed. Do not share your bank details or personal details in the comment box. For more queries visit the official website.

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