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Blog  /  Business  /  The Difference Between a Debit Card and Credit Card
What is the Best Choice for a Credit Card?

The Difference Between a Debit Card and Credit Card

Time to read: 3 minute(s)

Credit & debit cards look almost the same. Today, the type of card is not always affixed on plastic – debit or credit. However, according to the terms of registration and purpose, these banking products have differences. What is a debit card and credit card? Let’s analyse what the plastic holder should pay attention to, what types of cards are and how they differ.

Credit and Debit card difference

The key difference between a debit card and a credit card is that a customer uses a debit card as a means to purchase and store personal funds, while a credit card is used to manage borrowed money. There is no single answer to the question of which is better – a credit or debit card. Banking products are used as settlement plastic and have similar functionality, but provide the client with different service conditions and costs.
A debit card is a bank plastic card designed to store funds, pay for purchases, and receive bonuses and cashback. Making any debit does not take much time and complexity – banking institutions issue them without problems. Exceptions are cards with additional conditions. Debit cards do not have a credit limit, allow you to withdraw cash without commission from ATMs of the issuing institution, and are notable for their low cost of service. Some debit cards have an overdraft service, which allows you to debit more money from your current account than is there. In other words, this is a debit card the same as a credit card. However, it works under special conditions.
The main feature of credit cards is the presence of a predetermined amount of borrowed funds. With their help, the client pays for purchases online and offline. The use of borrowed funds is possible without a commission if you have time to make a return before the end of the interest-free period. Otherwise, high-interest rates are charged on credit card debt. The main feature is that it will not be possible to store your funds on credit cards.

Credit vs Debit card. External differences

Visually, the differences between debit and credit cards are almost imperceptible. This is a regular bank card with the name of the payment system, number, date, CVC, or CVV code. Individual design can be issued for both types of plastic cards – for an additional fee. Checking whether a debit or credit card is in front of you does not take much time – just carefully examine the plastic. How to understand what kind of plastic is in front of you? How is a credit card different from a debit card? The front side of the product says Credit – for a credit card; Debit – for a debit card. You can distinguish between debit and credit cards by functionality, validity period, cost, and method of receipt.

How to identify credit card and debit card?

There are several ways to distinguish a credit card from a debit card:

  • Visual differences.Some banks deliberately make different designs for the two types of cards.
  • Inscriptions. A credit card might say “Credit” or “C”, and a debit card might say “Debit” or “D”.
  • Online banking: a high-risk business bank account of the site, mobile application, which contains detailed information about the banking product. 
  • Contract. When a client opens a bank account online in Europe, he signs an agreement with the bank, which describes the terms of use, including the type of card.
  • Support. You will need to provide your full name, card number, and code word.
  • Check the card type by BIN – the first 6 digits of the number. To do this, go to a special site and enter 6 digits. As a result, the system will show the bank, payment system, and card type.

The key difference is that if you have a credit card, the client uses borrowed funds, while the debit product allows you to use only your own.

Credit or debit – which is better

It is impossible to say which of the cards is better – they are designed to solve different problems. You can pay for purchases and get more bonuses using a credit card. Keep funds, receive a salary, withdraw cash, make transfers – it is better with a debit card. There is a compromise. A good option for those who do not want to take on a lot of obligations but need small loans would be an overdraft debit card. Please note that some credit cards allow you to store personal funds and offer good balance bonuses. This is a credit card the same as a debit card. However, these savings will not be a full deposit as there is no high annual interest rate and significant transaction fees may be charged. To avoid huge commissions and possible fraud, use the Paydo payment service provider.

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