What is the difference between a credit card and a debit card?
Posted: Tue Jan 07, 2025 10:16 am
The main difference between a credit card and a debit card is that, while a debit card is linked to the balance in your bank account, a credit card allows you to make payments, purchases or advances through loans from the financial institution, which must then be repaid.
When you pay with a debit card, the money is deducted directly from your bank account. On the other hand, when using a credit card, the cardholder incurs a debt with the financial institution. Therefore, with a debit card you use the money you have available in your account, while with a credit card you use the money borrowed from the bank.
Although credit and debit cards share azerbaijan phone data many similarities, there are differences in how they work that are important to know in order to better control your expenses.
Whether you're using it to make purchases or manage payments for your business, understanding the features of each type of card is key to organizing your finances and maintaining good financial health.
Therefore, in this article we will tell you what the difference is between credit and debit cards , how to identify them, what the advantages and disadvantages of each are, and we will answer other common questions. Let's go!
Woman paying for a purchase in installments: one of the differences between a credit card and a debit card.
Differences between credit and debit cards
The main difference between a credit card and a debit card is that payment with a debit card is charged instantly to the bank account, while with a credit card payment can be made in instalments or spread over several months.
There are other aspects that make them different, besides the payment method. Below, we tell you some of them:
Credit cards allow you to finance purchases, so you can pay even if you do not have sufficient funds.
Debit cards do not charge interest. Credit cards do, however, both when withdrawing money and when deferring payments.
Credit cards allow fixed payment plans, with or without interest, depending on the merchant.
With debit cards, payment is instant, whereas credit cards offer the possibility of returning the amount spent in one full payment or several partial payments.
As for the requirements to obtain each one, in the case of debit cards, basic documentation is usually sufficient, while when requesting a line of credit, the requirements are greater and a prior evaluation is necessary.
When it comes to withdrawing cash, with debit cards you can do so for free at your bank, while with a credit card there will always be an associated fee.
When you pay with a debit card, the money is deducted directly from your bank account. On the other hand, when using a credit card, the cardholder incurs a debt with the financial institution. Therefore, with a debit card you use the money you have available in your account, while with a credit card you use the money borrowed from the bank.
Although credit and debit cards share azerbaijan phone data many similarities, there are differences in how they work that are important to know in order to better control your expenses.
Whether you're using it to make purchases or manage payments for your business, understanding the features of each type of card is key to organizing your finances and maintaining good financial health.
Therefore, in this article we will tell you what the difference is between credit and debit cards , how to identify them, what the advantages and disadvantages of each are, and we will answer other common questions. Let's go!
Woman paying for a purchase in installments: one of the differences between a credit card and a debit card.
Differences between credit and debit cards
The main difference between a credit card and a debit card is that payment with a debit card is charged instantly to the bank account, while with a credit card payment can be made in instalments or spread over several months.
There are other aspects that make them different, besides the payment method. Below, we tell you some of them:
Credit cards allow you to finance purchases, so you can pay even if you do not have sufficient funds.
Debit cards do not charge interest. Credit cards do, however, both when withdrawing money and when deferring payments.
Credit cards allow fixed payment plans, with or without interest, depending on the merchant.
With debit cards, payment is instant, whereas credit cards offer the possibility of returning the amount spent in one full payment or several partial payments.
As for the requirements to obtain each one, in the case of debit cards, basic documentation is usually sufficient, while when requesting a line of credit, the requirements are greater and a prior evaluation is necessary.
When it comes to withdrawing cash, with debit cards you can do so for free at your bank, while with a credit card there will always be an associated fee.