Debit Card vs Credit Card: How to Use these Cards Responsibly?

Debit Card vs Credit Card

Debit and credit cards, also referred to as “plastic money,” are financial tools that have successfully been an alternative to cash. Besides convenience, cashback, reward points, and secured transactions are just a few advantages that make these financial tools the preferred method for making transactions.

Even though they might seem similar, the truth is they are not. Let’s understand debit card vs credit card in detail. 

What are debit cards?

A bank issues a debit card against your current or savings account. The first thing to remember about a debit card is that you can only use the money currently in your bank account. This implies that when you use your debit card to make a transaction, the money will be debited immediately from your current or savings account.

What are credit cards?

With a credit card, you borrow money from your bank and use it to make purchases. You also have a 30 to 45-day grace period, during which you won’t be charged any interest on the borrowed amount when you repay it. In addition, when you get a credit card, you receive a personalised credit limit that specifies the maximum amount you can use the card for.

The table below illustrates debit cards vs credit cards in more detail.


Attributes Debit Card Credit Card
Usage You can use the fund available in your current or savings bank account. You can borrow funds from your bank.
Interest charges Not applicable Interest charges are levied on late payments.
Source of money Current or savings bank account Bank/Credit card issuing company
Impact on credit score No effect on credit score Timely repayments ensure creditworthiness and elevate your credit score.
Eligibility  No specific eligibility criteria are to be fulfilled. Must fulfil specific eligibility parameters in terms of age, income etc.
Spending Limit As much is available in your current or savings bank account. As specified by the bank/credit card issuing company.
Variety of Cards Yes Yes
Security Safe transactions, however minimal security against lost card liability Secure transactions, 100% protection against lost card liability
Extra Perks Minimal rewards and privileges Reward points and privileges on travel, dining, shopping, entertainment and more.
Cash Withdrawal from ATM Yes Yes but with Additional charges.

Pros and cons of debit cards


  • When you are paying with your own money, no debt is involved.
  • As there is no interest charged, you are not liable for any such expenses.
  • The debit card approval process is swift and simple.


  • You may be charged a specific amount if you use a different bank ATM to withdraw cash.
  • There is practically little protection in cases of averting debit card fraud.
  • Doesn’t help to build a credit history.

Pros and cons of credit cards


  • You may improve your credit score by using credit cards.
  • Compared to the perks of debit cards, the rewards here are notably higher.
  • They come with a defined credit limit that can be extended further. It gives you more freedom in terms of spending.


  • A high credit card interest rates is applied if your credit card bill payments are not made on time or in full.
  • Several charges apply to credit cards.
  • Missing a payment can have a negative effect on your credit score, irrespective of the reasons.

How to use these cards responsibly

Effective money management is essential for responsibly using your debit or credit cards.

Here are some tips to help you in the long run.

  • Make a budget.
  • Save first, spend later.
  • Read and understand the terms and conditions in your card agreement.
  • Check your statements regularly.
  • Stay below the credit limit.
  • Make timely payments.

Also Read: Reasons to Prefer a Credit Card Over a Debit Card 


A debit card and a credit card follow two different principles in terms of what they offer and how they function. Therefore, you need to opt for one that meets your requirements. Having said that, it is crucial to understand that effective money management is essential for responsibly using your debit or credit cards Pixwox. Also, remember to keep track of your expenses to avoid getting into debt or overspending.

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