A debit card allows you to access funds available in your bank account and make purchases directly. On the other hand, a credit card will enable you to borrow money from the card issuer within a predetermined limit, which can be utilised for purchasing goods or obtaining cash advances. While debit cards deduct funds directly from your bank account, credit cards facilitate borrowing from the card issuer. Both options come with their own set of benefits and constraints. One must be aware of the differences between these two cards to make well-informed decisions regarding your financial choices.


Debit and credit cards are commonly used to pay bills and shop online or in stores. Both of them make money transactions quick and easy, but there are some crucial differences.


Debit Card Vs Credit Card:


Debit cards are directly linked to your bank account. When you make a purchase, the money is immediately taken out of your account. However, using a credit card, you can borrow money from a bank or lender up to a certain limit.


Debit cards are mainly used for everyday spending, like buying groceries or paying bills, although they are also accepted for things like hotel stays, rental cars, and online purchases; credit cards are more convenient for these types of transactions and often offer better protection and offers for consumers.


Credit cards often come with rewards programs that offer cashback, points, or miles. Meanwhile, debit cards may also have rewards, but they're usually not as generous as credit card rewards.


Debit Cards Pros:



  • The debit card directly deducts funds from your bank account, preventing debt accumulation and interest charges.

  • A debit card is widely accepted for purchases and cash withdrawals from ATMs.

  • A debit card is helpful for budgeting, enabling easy tracking of available balances in your bank account to avoid overspending.


Debit Cards Cons:



  • A debit card lacks overdraft protection, potentially resulting in declined transactions if funds are insufficient.

  • A debit card does not usually come with rewards programs or cashback options compared to credit cards.

  • It doesn't contribute to building credit history, which limits benefits for credit score improvement.


Also Read: Urgent Need For Cash? Here's How You Can Transfer Money From Credit Card To Bank Account


Credit Cards Pros:



  • A credit card allows users to borrow money for significant purchases and has a grace period before interest charges are incurred.

  • It also facilitates building credit history through timely payments.

  • A credit card offers rewards and perks like cashback, travel rewards, and points.


Credit Card Cons:



  • A credit card has high interest rates, which poses a risk if the total balance isn't paid monthly.

  • Late payments and accumulating debt can lower credit scores, impacting creditworthiness.

  • A credit card may require its user to pay annual fees, cash advance costs, or balance transfer fees.