Credit Card vs Debit Card: Reasons for Choosing One Over the Other

Introduction to credit card vs debit card: Many debit and credit cards offer comparable features. Both cards often include the logo of a major credit card corporation, such as Visa or Mastercard, and may be used to purchase goods and services at merchants. A debit card withdraws funds straight from your bank account. A credit, on the other hand, card operates on a credit line that may be paid off later, giving you additional time to pay. Their creditworthiness determines a customer’s credit line, and they may choose how and when to use the credit line, which is usually invoiced monthly. But there’s much more than this. Here’s a credit card comparison with debit cards.

Although when you make a credit card comparison with debit cards, both have many similarities, they also have numerous distinctions. As a result, it is recommended that you conduct appropriate research and pick between the two depending on your short-term and long-term requirements. Here’s the debit card and credit card difference.

Debit Card vs Credit Card 

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Credit Card vs Debit Card
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Advantages of Debit Cards

  • You are not in debt since you are utilizing your own money.
  • It is less expensive to use because there are no interest costs.
  • It also functions as an ATM card, allowing you to withdraw cash from an ATM.
  • Approval for a debit card is now simpler and quicker.
  • It does not aid in the development of credit history.

Disadvantages of Debit Cards

  • Since money is deducted immediately from your account, you are unable to leave spare cash in your account.
  • If you forget to keep track of your spending, it might be challenging to balance your passbook at the end of the month.
  • If you withdraw money from another bank’s ATM, you may be charged a fee.
  • When it comes to debit card fraud, there is practically little security.

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Credit Card vs Debit Card
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Advantages of Credit Cards

  • Credit cards are particularly convenient since they eliminate the need to carry cash.
  • Credit cards contribute to the growth of your credit score.
  • You earn far more points than you would with a debit card.
  • Because they have relatively high credit limits, they allow you to be more flexible with your spending.

Disadvantages of Credit Cards

  • If you do not pay your payments on time or in full, you will be charged a hefty interest rate.
  • Credit cards incur a range of fees.
  • Missing a payment (even for legitimate reasons) can have a negative impact on your credit score. This is because you will then have to work much harder to construct it.
  • Even if you have a credit limit, you may be tempted to spend more than you have, resulting in debt.

That was the debit card and credit card difference. Now, let us look at which one you should choose.

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Credit Card vs Debit Card
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So, which one is superior?

As you can see, debit cards and credit cards each have their own set of benefits and drawbacks. However, in certain situations, you can select between the two depending on the debit card and credit card difference.

When shopping or transacting online, use a credit card. When purchasing online, credit cards are the most secure option. If you suspect fraud, you may always contact your bank and have your card blocked. Furthermore, reversing a charge to a credit card is significantly easier than changing a charge to a debit card.

To make a large-ticket purchase: 

Credit cards provide the ease of splitting transactions into EMIs. This makes it ideal to buy big tickets since they become cheaper on credit cards compared with debit cards.

For a trip, use a credit card:

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Credit Card vs Debit Card
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Most credit cards are widely accepted. As a result, you may use a credit card when travelling abroad or even domestically without having to worry about having foreign cash on hand. However, keep in mind that you will be charged a foreign currency mark-up fee when you swipe your card abroad, regardless of a debit or credit card.

Use a debit card only if you have spending problems:

It goes without saying that if you can’t manage your spending, you should utilize a debit card. You are less likely to overspend and incur credit card debt because the funds come from your savings account.

Only withdraw cash with a debit card:

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Credit Card vs Debit Card
Source: Pixabay

When you use your debit card to take out cash, you obtain access to your own funds; thus, there is no cost associated. However, if you withdraw cash with your credit card, you are withdrawing money that you do not have. Therefore, the bank will view this as a loan that you must repay at a high-interest rate.

Use Credit cards for additional benefits:

Card companies don’t advertise these benefits much, but they can still be treasured. In addition, your card issuer may also offer additional perks like protection on purchases and extended warranties on electronics.

Through a balance transfer offer, you can transfer the balance from one credit card to another and pay it down over a set amount of time while it accrues no interest. Some credit cards have introductory 0% APR periods for purchases and balance transfers. These are good ways to avoid interest charges, but you’ll still need to make monthly minimum payments.


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