what's the difference between a debit card and a credit card?

Answer 1

With a debit card, you use your own cash already in the bank. A debit card, or checkcard, is just like using a check from your checkbook.

With a credit card, you are making a loan by borrowing money from an instiution that you must repay. A credit card accrues interest if you do not pay it off on time.

Answer 2

Debit card allows you to draw cash or pay for purchases and services from your Savings Bank Account (normally, it could be a flexible deposit or a current account too in some cases - check with your bank). So, if you have balance in your account, you can pay. If you run out of balance, you can't use your debit card.

A Credit card is given by a bank based on your credit rating. So, the bank allows you a credit (cash credit is generally less than total credit) and gives you a grace period for paying. It also gives you an option of paying as little as just 5 % of the total outstanding, but then charges interest (they euphemistically call it service chrge), which is much higher than a normal loan from the same bank.

Answer 3

What is a Debit Card?
The card you use at the ATM is known as a debit card. When debit cards first appeared it was easy to tell them apart from credit cards. Debit cards didn’t have a credit card company logo on them; instead, they usually just had your bank name, your account number and your name.

Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump.

When you use your debit card to make a purchase, it’s just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account.

What is a Credit Card?
On the other hand, when you use your credit card to make a purchase you are using someone’s else’s money, specifically the issuer of the credit card, usually a banking institution.

In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money “loaned” to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR).

While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.

Answer 4

Debit is right out of your checking account. And it's an immediate deduction from your checking account. Usually with no fees. But every bank is different. With a credit card purchase you pay for it later. A credit card is like a loan that you pay when the pill comes in. You pay interest on that loan every month that you have a balance.

Answer 5

The card you use at the ATM is known as a debit card. When debit cards first appeared it was easy to tell them apart from credit cards. Debit cards didn’t have a credit card company logo on them; instead, they usually just had your bank name, your account number and your name.

Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump.

When you use your debit card to make a purchase, it’s just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account.


On the other hand, when you use your credit card to make a purchase you are using someone’s else’s money, specifically the issuer of the credit card, usually a banking institution.

In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money “loaned” to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR).

While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.
Credit Cards offer Better Protection!

Under federal law, if someone steals your credit card you're only responsible to pay the first $50 of unauthorized charges. However, if you notify the credit card issuer before a thief is able to make any charges you may be free from all liability. If the credit card is not physically present when an unauthorized or fraudulent purchase is made, such as over the internet, you’re also free from liability for those charges.

MasterCard and Visa offer zero-liability protection where you won’t pay any charges if someone uses your credit card to make an unauthorized purchase.

The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, the same as for a credit card, but only if you notify the issuer within two business days of discovering the card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don’t report the loss or theft within two business days.
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Answer 6

A debit card is like a ATM card. The money is removed from your account within 24 hours. A credit card is something you charge on time and make monthly payments on, plus interest.

Answer 7

A debit card is used with money you already have in the bank where a credit card is money you don't have but are borrowing from you credit card company and have to pay back.

Answer 8

A debit card is money taken directly from your bank account.

A credit card is not actually "your" money, it builds up and then you pay the credit card company, like any other bill.

Credit cards always add extra charges so I only use debit, because you can keep control of your finances better.

Answer 9

A debit card takes funds immediately from your checking account.

A credit card is a revolving loan with whichever financial institution issued the card and charges you an interest rate on unpaid balances.

A credit card provide more security, buyer protection and better unauthorized use protections than a debit card.

Answer 10

A debit care draws money directly from your bank account. Each time you use it - the money comes out of your bank.

A credit card means that each time you use it - you accrue a bill with the credit card company - and you need to make payments to them yourself to take care of the debt. Credit card will cost you a lot of money in interest if you don't have the discipline to pay off what you charge each month. And debt that remains unpaid at the end of your billing cycle gets interest added to it. Quite a lot, depending onthe interest rate you carry on your card.