Credit card và debit card

Greg DePersio has 13+ years of professional experience in sales và SEO & 3+ years as a freelance writer and editor.

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Janet Berry-Johnson is a CPA with 10 years of experience in public accounting and writes about income taxes & small business accounting.

Debit Card vs. Credit Card: An Overview

Many debit cards & credit cards have sầu similar features. Typically, both cards carry the logo sản phẩm of a major credit thẻ company, such as Visa or Masterthẻ, and both can be swiped at retailers to purchase goods và services. A debit thẻ, however, uses funds from your bank account. A credit card uses a credit line that can be paid baông chồng later, which gives you more time lớn pay. A customer"s credit line depends on their creditworthiness, và they can decide how & when to lớn spkết thúc the line of credit và are usually billed on a monthly cycle.

A debit thẻ may come with an overdraft line of credit connected to lớn a customer"s checking trương mục khổng lồ cover overspending. A credit thẻ has a specified amount of credit attached to lớn it, and if a consumer tries to lớn spkết thúc beyond the credit limit, the thẻ will be denied.

Credit cards are debt instruments. Debit cards are not.Unless a checking account comes with an overdraft, debit card users can only spover the money available in their bank tài khoản.A credit thẻ is linked to a line of credit offered by the company that issued the card.Credit cards help build credit history; debit cards don"t.

Debit Card

A debit card might look lượt thích a credit card, but it is distinctly different from one. A debit card is issued by a ngân hàng to lớn their customers lớn access funds without having to lớn write a paper kiểm tra or make a cash withdrawal.

A debit thẻ is linked to lớn one"s checking trương mục & can be used anywhere credit cards are permitted. If your debit card has a Visa biểu tượng logo, for example, it can be used anywhere that takes Visa. When you use a debit thẻ, the ngân hàng places a hold on the amount you have spent. Depending on the purchase amount và your bank, the money will go immediately out of your tài khoản or be held by the bank for 24 hours or longer.

You can use your debit thẻ lớn withdraw cash from your checking trương mục using a chất lượng personal identification number (PIN). When you use your debit thẻ for a purchase, you may be asked for your PIN, or you may be asked to sign for the purchase, similar khổng lồ a credit card.

For people trying to budget or not over-extend themselves financially, a debit card linked lớn a checking tài khoản may be a better option than a credit thẻ.

Some debit cards are prepaid, and funds are loaded onlớn the card by a financial institution. These cards can be used in the same manner as a standard-issued debit ngân hàng thẻ. However, prepaid cards are just that prepaid, và they are not linked to a person"s checking account.

ATM card vs. Debit Card

An automated teller machine (ATM) thẻ và a debit thẻ are similar. They both allow you khổng lồ withdraw funds from your checking or savings trương mục at an ATM. However, while both cards can allow you khổng lồ withdraw cash, usually only a debit card has a Visa or Masterthẻ log allowing it khổng lồ be used to lớn purchase goods & services. An ATM card can only be used to withdraw funds from your tài khoản.

Credit Card

A credit card is a debt instrument for financial transactions instead of cash or a check or a debit thẻ. Depending on its owner"s creditworthiness, a credit card may have a high spending limit or a lower one. When you use a credit card, the purchase amount is automatically added khổng lồ your outstanding balance.

With most credit card companies, a customer has 30 days khổng lồ pay before interest is charged on the outstanding balance, though in some cases, interest starts accruing right away.

Responsible credit thẻ users can often earn points và rewards from card issuers, and using credit in a positive manner helps build & maintain a svào credit score.

Interest rates on credit cards can be notoriously high; they are a chief way credit card companies make money. Savvy consumers can avoid paying it by settling their balance in full each month.

Key Differences

When you use a debit card, the money is automatically taken out of your checking tài khoản. When you use a credit card, you pay the bill later. You can"t use your debit thẻ if your ngân hàng account is empty, but you can use a credit thẻ. Besides, credit cards can help you build up your credit or hurt it.

A debit card is simply a tool lớn use in place of a kiểm tra or actual cash. You are borrowing money when you use a credit thẻ. When you use a debit thẻ, you are using your funds.

There isn"t necessarily a better thẻ to lớn use. Using credit versus using a debit card, which is essentially cash, depends on how you want to lớn spkết thúc and manage your money.

However, if someone steals your debit card và takes funds out of your trương mục, it may be more difficult & take longer lớn get the funds baông xã than if someone steals your credit thẻ. In that case, you can report the card stolen, and your liability is limited.

Debit Card vs. Credit Card Example

Consider two customers who each purchase a television from a local electronics store for $300. One uses a standard debit thẻ, & the other uses a credit thẻ.

The debit card customer swipes their card. Their bank immediately places a $300 hold on their account, effectively earmarking that money for the television purchase & preventing them from spending it on something else. Over the next one lớn three days, the store sends the transaction details khổng lồ the bank, which electronically transfers the funds owed to lớn the store.

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The other customer uses a traditional credit card. When they swipe it, the credit thẻ company automatically adds the purchase price lớn their card account"s outstanding balance. The credit-card using customer has until their next billing due date lớn reimburse the company by paying some or all of the amount shown on their statement.

Special Considerations

However, the distinction between debt and non-debt instruments becomes blurred if a debit card user decides to implement overdraft protection. In this case, whenever a person withdraws more money than is available in their account, the bank pays the outstanding amount. The ngân hàng trương mục holder is then obligated khổng lồ repay the account balance owed and any interest charges that apply to lớn overdraft protection.

Overdraft protection is designed lớn prsự kiện embarrassing situations, such as bounced checks or declined debit transactions. However, this protection does not come cheaply; the interest rates charged by banks for using overdraft protection are as high, if not higher, than the ones associated with credit cards. Therefore, using a debit card with overdraft protection can result in debt-lượt thích consequences.

Debit Card vs. Credit Card FAQs

What's the Difference Between a Debit Card & a Credit Card?

The main difference between the two cards is the question, "Do you want to lớn pay now or later?" A debit card is tied khổng lồ your checking or savings tài khoản, & when you use it, funds are removed within 24 hours from your trương mục. A credit card can be used lớn immediately pay for goods & services, but you pay for them when your monthly billing cycle is due.

Which is Better, a Credit Card or Debit Card?

Each card has its own uses and benefits depending on the individual. For example, you may want khổng lồ consider a credit card for larger purchases, but only if you know, you can pay your bill on time. If you need cash, it is less expensive sầu overall lớn use your debit thẻ rather than take out a cash advance on your credit thẻ. When you pay with cash, you don"t go into lớn debt, which is a risk when you use a credit thẻ.

Credit cards are useful in an emergency at trang chính và abroad. If you have a line of credit at your disposal, you can make an emergency payment without worrying about the money going out of your ngân hàng tài khoản. Besides, most car rental companies, hotels, & resorts will only accept a credit thẻ on file versus a debit thẻ when you travel.

If you want lớn build up your credit history, it makes sense to use your thẻ responsibly. Likewise, if your card comes with a rewards program, you may want to use your credit card khổng lồ earn these benefits. While some debit cards may offer rewards, most don"t, and your debit card doesn"t improve your credit history.

Is a Credit Card Safer Than a Debit Card?

In most cases, yes. If someone steals your debit card, they have direct access to the cash in your accounts. If someone steals your credit card, you don"t lose actual money from your checking or savings account. Banks will freeze your account when you report a thẻ stolen, but you will have sầu more liability than if your credit card is stolen or used.

Can I Use a Credit Card as a Debit Card?

You can use your credit thẻ at an ATM to take out a cash advance from your line of credit. However, most credit cards come with high fees for taking what is, in essence, a short-term loan from your creditor. If you need cash, it may be more prudent to lớn use your debit card.

The Bottom Line

By definition, all credit cards are debt instruments. Whenever someone uses a credit card for a transaction, the cardholder is essentially just borrowing money from a company because the credit thẻ user is still obligated to repay the credit card company.

On the other hvà, debit cards are not debt instruments because whenever someone uses a debit thẻ to lớn make a payment, that person is just tapping into their bank account. Except for any related transaction costs, the debit user does not owe money lớn any external party; the purchase was made with their available funds.

Debit cards và credit cards are both useful tools when you are paying for goods and services. If you are worried about overspending & on a tight budget, a debit thẻ (without an overdraft) may ensure you only spover what you can afford.

A credit card will help you build your credit history, và it is useful in an emergency. You will be less liable for charges if someone steals your credit card versus your debit thẻ, but you run the risk of getting into debt with a credit thẻ with charges that you can"t afford to pay back. Both cards can be useful to consumers, especially those who pay close attention to their purchases and pay their bills on time. requires writers lớn use primary sources to lớn support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original retìm kiếm from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.





A debit card lets consumers pay for purchases by deducting money from their checking tài khoản. Learn how debit cards work, their fees, & pros & cons.
A checking trương mục is a deposit trương mục held at a financial institution that allows deposits & withdrawals. Checking accounts are very liquid và can be accessed using checks, automated teller machines, & electronic debits, aý muốn other methods.
An NSF fee or non-sufficient funds fee occurs when a ngân hàng account does not have enough money to lớn cover a payment. Read about NSF fees và how to lớn avoid them.
A traveler’s check is a once-popular—but now largely outmoded—exchange medium used in place of currency, often by people traveling abroad.
Overdraft protection is a fund transfer or loan that banks offer lớn customers to cover checks or debits larger than their account balances, so as khổng lồ avoid nonsufficient funds fees.
An overdraft is an extension of credit from a lending institution when an tài khoản reaches zero. Overdrafts come with interest and additional fees và should only be used sparingly.

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