Credit Card vs Debit Card: What’s the Difference?

Credit Card vs. Debit Card

Credit Card vs Debit Card – Credit cards and debit cards are both payment cards that can be used to make purchases in stores or online. However, there are some key differences between the two types of cards.

What is A Credit Card?

A credit card is basically debit card in reverse. It helps you borrow money instead and adds the charge to your credit. However, credit cards usually work with a line of credit called the card’s credit limit. What this means is that you have a cap on the maximum amount you can borrow. Basically, using a credit card means the bank pays the dealer on your behalf, and later on, you pay the bank. Most times, credit card payments usually come with high-interest rates, meaning you’d eventually pay more than you spent. Also, interest accumulates when you carry over a balance from one month to another. Overall, customers are judged by a credit score by credit bureau companies. You can see what a credit card generator is here.

A credit card is a loan

When you use a credit card, you are borrowing money from the credit card company. You will need to pay back the loan, plus interest, on or before the due date. If you do not pay the full balance, you will accrue interest charges on the remaining balance.

What is A Debit Card?

A debit card is simply an internet banking card that has the capacity to draw funds directly from your bank account. Therefore, the card is linked to your bank account, and when you make a purchase, it debits funds from there. Also, transactions using a debit card works swiftly, as approval takes mere seconds due to digital advancements. However, it could also take a few hours to days depending on the other factors. Also, it does not usually come with interests.

A debit card is linked to your bank account

When you use a debit card, the money is withdrawn directly from your bank account. This means that you can only spend money that you already have in your account.

Can I use a debit card as a credit card?

Yes, technically you can. This is because a debit card could act as a credit card when you intend to make a payment. Furthermore, the difference is that the charges deducted would be from your bank account, therefore it has to contain that exact amount or more. However, for credit cards, you do not need to have the amount, as the sum would simply be added to your line of credit, which you can pay off later. This is why payment options usually have only the “pay with credit card option” and not pay with credit or debit cards separately.

Is an ATM card a credit card?

No, an ATM card is not a credit card. This is because they are linked directly to your account and only fund withdrawals or payments when you have enough funds in the account. Therefore, outside that, you cannot carry out any transactions. ATM cards are debit cards.

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Here are some of the key differences between credit cards and debit cards:

  • Interest: Credit cards typically have higher interest rates than debit cards. This means that you will pay more in interest if you carry a balance on your credit card.
  • Fraud protection: Credit cards offer more fraud protection than debit cards. If your credit card is stolen and used fraudulently, you are not liable for any unauthorized charges. With a debit card, you may be liable for some or all of the unauthorized charges.
  • Building credit: Using a credit card responsibly can help you build your credit history. A good credit history can help you qualify for loans and other forms of credit at lower interest rates.
  • Convenience: Credit cards offer more convenience than debit cards. You can use a credit card to make purchases online or over the phone, even if you do not have a checking account.

Which type of card is right for you?

The best type of card for you depends on your individual needs and spending habits. If you are trying to build your credit history, a credit card is a good option. However, if you are not good at managing your spending, a debit card may be a better choice.

Ultimately, the best way to decide which type of card is right for you is to talk to your bank or credit union. They can help you understand the pros and cons of each type of card and make the best decision for your financial situation.


Credit and debit cards are equally useful for everyone. However, they should be used carefully, and in appropriate situations, especially credit cards. Although credit cards could help you afford what you normally can’t, they could also land you in serious debt.

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See also: How to Block an ATM Card for All Banks in Nigeria

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