Many people are often confused about the difference between a credit and a debit card. And it makes total sense, as they are charged at all the same places and provide convenience to most individuals.

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Credit cards and debit cards are two very different types of cards almost serving the same purpose. Further in this article, you will read all the differences between the two, which will clarify all the questions you might as well have in mind.

What is a Debit Card?

Let’s first talk about what a debit card is and how it works. A debit card offers convenience to the user and uses their own deposited money for any purchase or transaction the user makes.

It can be used through cheques, ATM/Debit cards. The money can be withdrawn or used at any time, without any limit.

What is a Credit Card?

A credit card provides more convenience than a debit card. How? Unlike debit cards, credit cards do not require affiliated accounts with money. This is because they do not use your money for purchases. The money is credited to your card as a bank loan, which is to be returned after a certain period.

The Difference between a Credit and a Debit Card:

The use of Money for Purchases:

As mentioned above, the first and foremost difference is that debate card uses your money for purchases while credit cards are a limited credit provided to you by the bank that needs to be paid.

There are chances you might overspend with credit cards depending on your credit limit, and with debit cards, you have to restrict yourself due to less amount in your account.

The Requirement for a Pin:

Another point of difference is that credit cards do not require any pin code when swiped for purchases. In comparison, debit cards come with a personalized pin.

This pin needs to be entered at ATMs for withdrawal and online and in stores to complete the purchase. This pin is not to be shared with anyone as it can be dangerous and harmful for the cardholder.

Interest on Purchases:

Credit cardholders might need to pay interest on purchases, especially if they cannot pay the used credit amount after every 30 days, i.e., monthly. Whereas, on the other hand, debit card owners are free from any interest at all.

Effect on Credit History:

Credit Card users can affect their card history if they cannot pay their dues or missed a payment deadline. In any way, if the user is unable to maintain punctual payment schedules, their credit history is affected. Debit card owners do not need to worry about that, as their use or payments through their card do not influence their credit history.

Deciding a Credit Limit:

When it comes to a credit card, the bank decides your credit limit based on your credit history, income, and the type of card you choose. However, a debit card owner does not need to worry about any limit and can add or spend whatever they want from their account at any time.

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