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What is the difference between a credit and debit card?
The difference between a credit and debit card is how you pay for a purchase, with the debit card the amount is charged directly to your own account and with the credit card you can defer it and pay it in the future, generally the following month.
| Service | Debit | Credit card |
|---|---|---|
| How paid? | You pay with the credit that the bank has given you (usually does not carry interest) | With the money you have in your account |
| When do I pay? | At the end of the month or a percentage each month | At the time |
| Do you acquire a debt? | Yes, with the bank | No |
| Can I withdraw money at ATMs? | You can withdraw money from the ATMs of the entity itself or from any other always with an associated commission | Withdrawals can be made from any ATM of the bank itself for free |
| Commissions? | They have commissions for maintenance and issuance | They may have a maintenance fee if the associated conditions are not met |
| Associated insurance? | Compulsory insurance against theft or fraud | Additional insurance: travel, accident or online purchases |
| It’s free? | No, it is possible that the bank may request an amount for issuance and maintenance | Yes, they are usually free |
| card limit | The withdrawal limit is the maximum of the credit line. | The limit to withdraw money is the balance of the account itself. |
| Can it be stirring? | Yes, credit cards can be revolving cards | No |
Main differences between credit and debit card
Financing is the feature that really makes the difference between cards, whether credit or debit.
- Credit card: with this alternative you can choose the way to return the money for the purchases made. There are two options:
- Total payment at the end of the month: the entire amount of the payments made in a single installment, without interest, will be paid at the beginning of the following month.
- Deferred payment: allows you to divide the expense in all the desired terms, establishing a fixed payment every month or paying a percentage of the total debt. With this election, you will have to pay interest that should be around 18% APR, known as revolving cards.
- Debit card: the amount that has been spent is subtracted from the checking account to which the card is linked
Is the form of payment the same?
Another of the great distinctions between a debit and credit card consists of the payment method of each of them.
- Credit card: the expense is taken from the financing line granted by the bank regardless of whether funds are available. In this way, the owner acquires a debt with the bank that he will have to pay in one or several terms.
- Debit card: this type of card charges the amount directly to the holder’s account and disbursements can be made until there is an available balance.
The card commissions
One aspect to consider when contracting this type of card is whether they have associated commissions for which you will have to pay each month.
- Debit card: complying with the conditions established by the entity do not carry commissions. Otherwise, the maintenance cost would be paid.
- Credit card: they carry commissions for maintenance, issuance and for management of different services.
Card issuers
Within the companies that distribute the cards, whether credit or debit, we can find different types of companies that are responsible for issuing them.
- Debit cards: this type of card can only be issued by banks associated with a previous bank account in that entity.
- Credit cards: this card model can be distributed by companies that are not banks but that can offer lines of credit for purchases in their stores.
Withdrawal of money at ATMs from cards
Withdrawing money from an ATM for a matter of necessity or accessibility also implies differences between credit and debit cards.
| Service | Debit | Credit card |
|---|---|---|
| ATM withdrawal | With the credit card you can withdraw money from the ATMs of the entity itself or any other, always with an associated commission. | Withdrawals can be made from any ATM of the bank itself without charging commissions. |
| card limit | The withdrawal limit is the maximum of the credit line. | The limit to withdraw money is the balance of the account itself. |
Card Insurance
Another fairly clear disparity between a debit card and a credit card is the free insurance that comes with it.
- Debit card: in addition to the mandatory insurance against theft or fraud, it is not usual for them to include extra insurance.
- Credit card: they usually include travel insurance, robbery at ATMs, accidents or online purchases.
Additional advantages of the credit and debit card
Depending on the card you choose, the added benefits you can benefit from increase considerably.
- Debit cards: they usually offer discounts on gasoline or shops, but with generally small percentages.
- Credit cards: in them you can find bigger discounts in shops, loyalty programs and points or refund of a part of the amount of a purchase.
Differences when contracting a credit and debit card
This section is relevant for signing a card with a bank because due to the type of “plastic” chosen, the requirements will vary.
| Service | Credit card | Debit |
|---|---|---|
| Application | Since a line of credit is requested, the requirements are higher and the bank will have to carry out a prior evaluation. | Contracting this type of card is much more accessible since it only depends on the money that the holder has. |
| Requirements | Entities can request the latest payroll to verify income, not have other credits contracted or not be included in the list of delinquents. | They will only ask for the identification document. |
Similarities Between a Credit and Debit Card
Despite the fact that the central axis is the differences, between these plastics there are a series of similarities that should be taken into account.
Similarities between credit and debit card
- Contracting online and in the office : both debit and credit cards can be purchased digitally or physically. This will depend on each bank.
- Contact-less system : this technology does not depend on the type of card and will be included in all of them.
- The card numbers will have the same structure: the amount of data that these plastics have (card number, cvv and expiration date) will have the same length and both must be associated with a customer in order to work.
- Physical and virtual appearance: Whether obtained physically or virtual, the appearance of the plastic will be the same.
- Its task will be the same: with the credit or debit card you can withdraw money from ATMs, pay in shops or over the internet
- Theft or loss: in this case, the process to block the card will be the same.
Frequently asked questions about the differences between credit and debit cards
How do I know if my card is credit or debit?
To find out if you have a debit or credit card, you have to look at the points explained above, but you can also find this information in: the card has to specify its characteristics, as well as what can be found by accessing the mobile or web application, or in the contract itself.
Do credit and debit cards have any similarities?
Not all are differences between credit and debit cards, you can also find some similarities such as physical appearance, both are associated with a customer, they allow contact-less technology and the information is the same for each one.
Are there interest differences between credit and debit cards?
The main distinction is that credit cards can carry interest for the payment of purchases that have been decided to be postponed and debit cards never carry interest on purchases. Similarly, both may include issuance and maintenance interest.
How do I distinguish the credit and debit card if I have them on the same card?
Some banks offer both forms of payment on the same card, which means having the credit and debit card in the same plastic. Generally, each face of the card is different, but otherwise, it is common for purchases to be made with the debit card unless we want to use the credit card, which will have to be specified from the application itself.