What is the difference between a debit card and a credit card?

What is a credit card?

Credit cards have emerged as a preferred mode of payment online, given the convenience of borrowing money with the option to repay later. When you apply for a credit card your credit history, age, income and other parameters are taken into account to decide your credit limit-the maximum amount that you can spend using your card.

The amount borrowed can be repaid in EMIs or lump sum before the bill due date. Interest is charged on the outstanding amount if the credit card payment is delayed. You can choose a credit card as per your needs such as one that offers discounts on grocery shopping, rewards on lifestyle purchases or travel discounts as per your needs.

What is a debit card?

While in most cases you have to apply for a credit card, debit cards are issued by banks when you have an existing saving or current account. So, you can spend the money in your bank account using a debit card when you buy a product online or offline. The corresponding amount is deducted from your bank balance. While the debit card offers you the advantage of making cashless payments, it can leave you helpless in an emergency when you do not have adequate funds in the bank.

Difference between a credit card and debit card


Let us look at what distinguishes credit cards from debit cards:


Credit limit: A credit card has a set monthly limit beyond which you cannot spend, unlike a debit card which gives you access to all the money in your savings account

Withdrawal: You need to pay withdrawal charges and interest for using your credit card at an ATM. ATM cash withdrawal using a debit card from bank ATMs is chargeable only after certain free withdrawals as per your bank guidelines.

Interest: One difference between a credit card and a debit card is that credit card payment attracts interest if paid after the bill due date. Interest-free credit is offered only for up to 50 days. No such rules apply for debit cards.

Security: Both credit and debit cards come with stringent security systems to prevent financial frauds. However, credit cards also offer zero liability insurance against theft or loss.

Eligibility: Your income and creditworthiness along with other criteria are taken into account when you apply for a credit card. A debit card can easily be availed against a savings or current account in a bank.

Benefits: A credit card comes with a lot of advantages such as cash backs, discounts, reward points that can then be redeemed as free flight tickets, movie tickets, or gift vouchers. In some cases, debit cards might also help you save by offering a discount for spends above a certain amount as specified by the merchant.



Now that you know the difference between a credit card and a debit card, you may realise the benefits that you get when you apply for a credit card far outweigh the latter. Credit cards available on Finserv MARKETS cater to your needs whether you are a student, professional or a housewife.

Get assured welcome bonuses, and enjoy rewards, discounts, offers and cash backs along with added security measures that protect you against online theft and fraud. Make your credit card payment with effortless EMIs at your convenience and welcome to the world of financial independence!

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