Credit and debit card – how do they differ?

Non-cash transactions using payment cards are now a common way to pay for purchases. Many of us have a debit card, but not everyone can know how it differs from a credit card. Although we can use both when we buy goods and services, they work on different principles. What?

Debit card – what is it?


As a rule, you get a debit card by opening a settlement and savings account at the bank. It is used for non-cash payments in stationary and online stores, and for withdrawing funds accumulated on the account.

Credit card – what does it consist of?

A credit card is a payment card that the bank will issue to you when granting a credit limit. You will be able to use the bank’s cash up to the limit set by the bank. If you repay the amounts due on time, you will not incur additional costs. If you are late with the repayment, the bank will charge interest.

What’s the difference between a debit and credit card?


The difference between a debit and credit card boils down to the source of capital that we can use.

By using a debit card , you use your own funds collected on your personal account . Therefore, if you make a purchase using a debit card, the equivalent amount for the purchased goods will be charged to your bank account. This will also happen if you withdraw money from an ATM. When your account runs out of money, attempting to complete the transaction will result in rejecting it.

In the case of a credit card , on the other hand, you manage your money, not your own, but the bank’s money up to a set limit . The credit card is in no way linked to the funds in your personal bank account. A reasonable and wisely used credit card can bring financial benefits. Due to the ease of access to finance it provides, you do not have to pay off all your debt in a given billing cycle.

What is the difference between a debit and credit card?


The credit card is created for non-cash transactions . This means that you can pay with it in stationary and online stores (e.g. buy a flight ticket purchased online). You can use it in the same way as a debit card and use it to withdraw money from an ATM, but such cash withdrawals will involve a commission and the need to pay interest.

What to choose – a debit or credit card?

As a savings and settlement account holder, you do not have to choose only a debit or credit card . You will receive the first one from the bank after creating the account – you can use it freely on the conditions specified by the bank, as long as there is cash on it. However, a credit card is a great help in urgent, crisis situations , so you should decide on it as a kind of financial security.

It can be useful during spontaneous or unplanned purchases, as well as help with larger expenses for which the funds from the debit card are not enough. You don’t have to use a credit card as often as a debit card, but there are times when you should have it with you. For example: when you buy Christmas presents, pay for your dream concert or unexpected repair at home, credit card funds can be salutary. So if you feel that you need additional and long-term security , a credit card will be the perfect solution. It is not a one-time loan, you can use it regularly , as long as you repay previously incurred payments on time.

Remember, credit and debit cards are often confused. If you have both, think about which one will be more beneficial to you before making a transaction.