Debit Card vs Credit Card
Debit Card vs Credit Card

Debit Card vs Credit Card – Which Is Right For You?

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In today’s fast-paced world of financial transactions, debit cards and credit cards have emerged as two of our strongest assets. These instruments have transformed how we manage our finances, providing plenty of benefits. Factors such as financial goals, lifestyle, etc., can help you choose a suitable card. This way, you can settle the debit card vs credit card debate once and for all.   

Understanding the Difference

How debit cards and credit cards withdraw funds is the core difference between the two. Both cards are used to pay for goods and services you use at a shop, market, etc. Debit cards work by withdrawing cash from the cardholder’s account balance. On the contrary, credit cards obtain funds with the help of a line of credit.  

Pros and Cons of Debit & Credit Cards

Before you decide which card is right for you, let us highlight some pros and cons of debit and credit cards.

Benefits of a Debit Card

  • Debt-free transactions – With a debit card, spending more money than you have in your account balance is impossible. In the worst cases, your debit card might have insufficient funds, but you are still not spending money you do not have. As a result, you never end up accruing unwanted debt and interest.
  • Easy withdrawals – You can quickly and easily withdraw funds with a debit card. Thanks to ATMs located everywhere, you can access cash as and when you want.

Drawbacks of a Debit Card

  • Limited funds – When paying using a debit card, you must be mindful of your account balance. Your purchasing power is restricted to the funds available in your account. This restriction can make it impossible to make emergency payments above your bank balance.
  • Limited fraud protection – Though rare, fraudulent charges are made on debit cards to this day. The funds are withdrawn instantly, causing a financial loss if and until you get reimbursed.
  • Inability to build credit score – Everything you do with your debit card is within your bank balance. For this reason, debit cards cannot allow you to build your credit score, which you could use for other transactions. 

Benefits of a Credit Card

  • Increase line of credit – With a credit card, you get the luxury of increasing the total money you can borrow. Eventually, you can expand your purchasing power and make larger transactions.
  • Establish credit score – Making payments with a credit card allows you to establish a credit history, improving your credit score. A high credit score helps you obtain a car or mortgage loan at lower interest rates.
  • Emergency payments – Payments made with a credit card aren’t limited to your account balance. A credit card may come in handy in an emergency where you need to make large payments instantly.  

Read: A Step-by-Step Guide on Transferring Money from a Credit Card to a Bank Account

Drawbacks of a Credit Card

  • Debt – Having the ability to spend more than you already possess may not always be a good idea. Doing so might result in burdening a person with debt.
  • Interest on unpaid balance – As a person using a credit card, you must pay the balance amount each month. Those who fail to do so are charged interest on the unpaid balance.

The big question – Which one is Right for you?

As stated earlier, both types of cards have their advantages and disadvantages. You can better understand the debit card vs. credit card debate based on several parameters we will discuss.

  1. Convenience – A debit card allows quick access to your funds but has a limited spending capacity. A credit card helps you enjoy more financial flexibility.
  2. Debt – Debit cards don’t pile you up in debt, while credit cards are usually guilty of doing so.
  3. Safety – A debit card offers less security to the cardholder in fraud cases. On the other hand, a credit card provides strong protection from fraud.
  4. Credit building – A debit card doesn’t help you establish a credit score, while a credit card can help significantly.
  5. Perks – Regular use of debit cards doesn’t make you eligible for rewards or perks. Meanwhile, most credit card offers exciting rewards, which include cashback and travel perks.
  6. Eligibility – An individual must be 18 years or older for credit card eligibility. You can get a debit card once you turn 15. 


Based on the parameters discussed above, it is evident that both debit cards and credit cards are essential financial tools. They both have certain drawbacks too. Your choice should depend on your financial habits, lifestyle and aspirations. Understanding how you manage your spending is the key to taking your pick.

Read: Exploring the Contrasts between Credit and Debit Cards

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