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Home » Wondering about the difference between a credit card and a debit card? Get to know what’s best for you.

Wondering about the difference between a credit card and a debit card? Get to know what’s best for you.

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There’s no shortage of advice about how to make money online or how to start your own business online, but little is actually written about using the internet to pay for things. Sure you got a lot of articles on “how to sell online” and “how to make an online business” but we don’t often hear about how people actually use the internet for basic financial transactions. We are emerging into a world where we can simply tap a button and pay for something, more and more people are starting to take notice of this and they’re interested in learning more about the new way to pay called – Plastic Money.

What is Plastic Money?

Plastic money is an electronic form of currency with a certain amount of money preloaded on the card. It’s really just like normal cash, but it’s loaded onto a card to make purchases easier and more convenient. The adoption of plastic money in India made both accounting and auditing easy too. It minimized the use of paper and saved trees as well. There are advantages for consumers too – convenience and safety, as you don‟t have to carry cash around all the time; helps reduce crime, and keeps a record of your spending. Talking Plastic Money holds various variants under its name but the two which have garnered the popularity amongst masses are – Debit Card and Credit Card.

Having said that, Plastic Cards such as Credit and Debit Cards are still a tough chapter for people to understand, and the first thing that they get caught on is the difference between a credit and debit card. So let’s discuss and make it clear for the readers, but before that let us tell you what

What is a Credit Card?

Credit cards offer you a way to borrow money, which you will be required to pay back in the future. If you don’t make the minimum monthly payment or pay off the full balance before your due date, you will be charged interest on the unpaid balance. You can use a credit card to make purchases and/or balance transfers, as well as cash advances from ATMs. Depending on what type of card it is, there could be an annual fee associated with your account. Using a credit card can be a great thing. You can purchase items without having to use cash; have the option of paying off the balance later or transferring it to your bank accounts; or even withdraw money from the ATM, although this is not the best option.

What is a Debit Card?

A debit card is a fast, easy and secure way to pay for purchases. It works just like an ATM card and lets you transfer money from your checking account to pay for goods and services. A debit card is a card you use in place of writing cheques or receiving cash, with your checking account as the source of funds. It allows you to pay for things directly from your account and avoid carrying large amounts of cash around with you. There are no transaction fees when you shop with a debit card because the money comes directly from your account.

What is the Difference between Credit and Debit Card

There are many differences between credit cards and debit cards.

Let’s take a look at them!

  • Credit card transactions are backed by your credit/debit line and can be paid in installments. Debit cards work like regular ATM cards where you have to pay the full amount of your purchase immediately.

  • Credit card holders enjoy better protection against fraud than do debit card users who link their cards to a bank account.

  • A debit card can help you avoid accumulating debts, but with a credit card, you run the risk of overspending.

  • A debit card allows you to reap many benefits on spending such as reward points, vouchers, and cashback whereas a credit card doesn’t offer any such benefits.

  • A credit card is a useful tool to help you build your credit score, whereas debit cards don’t offer the same opportunity.

  • In the case of a credit card, you have to pay interest rates and other fees. Whereas in the case of debit cards, you don’t have to pay any fees as you are directly paying from your account.


No, unlike Credit Cards, Debit Cards don’t ask for any annual fees.

Debit cards have additional charges beyond their initial purchase price, including monthly maintenance fees, overdraft fees if you overspend from your account, returned-item fees, and foreign ATM fees if you use your debit card at another bank or financial institution’s machine.

Yes, almost all banks apply a certain interest rate on their Credit Cards.

Credit cards usually offer more consumer protections than debit cards when it comes to purchases made with the intent of fraud.

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