Debit cards and credit cards are widely used payment instruments, but there is a difference between a debit card and a credit card. This is based on their functionality, source of funds, and repayment structure. The money for the purchase is almost immediately deducted from your checking account when you use a debit card. Using a credit card allows you extra time to pay because the amount will be applied to your line of credit, allowing you to pay the payment later.
What is the Credit Card and Debit Card Difference?
The basic differences between both are;
Debit card | Credit card |
Debit cards use your bank balance | Credit cards use borrowed funds |
Debit cards are commonly used for ATM withdrawals, online shopping, and POS transactions | A credit card, on the other hand, allows users to borrow money up to a pre-approved credit limit set by the issuing bank. |
No interest on debit cards | Interest applies on unpaid credit card dues |
Debit cards encourage controlled spending | Credit cards can lead to overspending if not managed wisely |
Hope this helps!
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What is the Difference Between a Debit Card and a Credit Card?
ravi
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2025-05-21T12:41:09+00:00 2025-05-21T13:03:41+00:00Comment
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