The common thing that debit cards and credit cards have among them is that they are both used to pay for items. This is without writing a cheque or paying in cash. The difference between a credit card and a debit card is where the money for the item purchased comes from. Let us consider this difference in further detail:

When a cardholder uses a debit card, the payment is made from the checking account. This process nearly takes place in real-time. Instead, when you use a credit card, you are charged from the credit limit offered by the issuing bank. You do pay this amount at a later point in time when you receive the bill for one’s credit card. So, an important difference between credit cards and debit cards is that using a credit card gives you additional time to pay.

Choosing which card to use, debit card or credit card, for your purchases is sometimes complicated. A recommendable way to go about it is to use your debit card for everyday purchases. This way, a cardholder will see the money directly being derived from their checking account. However, when you invest in reasonably more expensive items, such as a hotel room or a rental car, you may choose to use a credit card. This way, you can use the money present in your account to pay for other items. You can then save some money for the time when you will be required to pay.

Advantages of using a debit card

Debit cards are convenient and can be particularly handy when you are not carrying much cash.

  • Keep one debt-free

Credit cards add to the debt, but debit cards don’t because your checking account is debited every time you use a debit card. Using a debit card helps you stay within budget. Banks sometimes charge a return fee or overdraft if you spend more than what is present in the checking account.

  • Access to cash is easy

Debit cards allow cash withdrawal from any ATM.

  • Avoid having to pay bills later

When you pay using a debit card, you receive no bills towards the end of the month. This way, no interest accumulates over time. By avoiding the return fee and overdraft, you should be just fine.

Advantages of using a credit card

  • More time to pay for the purchases

Towards the end of the monthly credit card cycle, you receive a bill that states how much you owe for the purchases made 30-days prior. You’d have a few weeks at your disposal to pay off your credit card bills. People wonder how to pay credit card bills online, and it’s not too difficult.

Technically, all you need to pay is the minimum fee every month. But, the likelihood of going into debt in the future increases this way. If you do not pay off the entire bill, the credit card company charges interest.

  • Build your credit history

Whenever you purchase something over your credit card and pay off your bills in time, it builds your credit history. This comes in handy in situations such as taking a loan or buying a house or a car.

  • Ideal for emergencies

In emergencies such as urgent home repairs, you do not have to disrupt your budget and can pay using your credit card. This buys the cardholder at least a month’s time to pay off the credit card bills.


People contemplate if they should acquire a credit card or keep using the debit card as a convenient mode of payment. Owning a credit card allows you to buy on credit and allows at least a month to pay the credit card bills. So, you can make purchases without having to disrupt your budget. The offers, discounts and reward points using a credit card are an additional bonus.

By Manali