Credit Card or Debit Card: Which One Users Should Go for?

Credit Card or Debit Card: Which One Users Should Go for?

Credit cards and debit cards both play a vital role in everyday transactions. Though their objective is the same, they differ based on functioning. Depending on the requirements, you can choose either. However, people often need clarification when choosing a debit or credit card online.Β 

This blog will focus on understanding the functioning of these two cards. Based on the findings, you can decide which one suits you best.

What is Credit Card and Debit Card?

The following points will clarify what credit and debit cards are.Β 

Credit CardΒ 

It is a financial tool that offers users a credit limit for shopping and other transactions. Users can pay bills, purchase, and access reward points using the card. You can repay the amount later, even through simple EMIs within the given period.

Debit CardΒ 

A debit card is a financial tool provided by an individual’s bank, functioning as a payment card. It lets users transact directly by withdrawing funds from their associated bank account. This card provides a convenient avenue for accessing funds, allowing for withdrawals, purchases, and online transactions, akin to a credit card.

Parameter-based Comparison of Credit Card and Debit CardΒ 

Below is a list of striking contrasts between credit and debit cards. This will help the users to clear confusion about when and why to use a credit card online and a debit card.Β 

  • Annual Fees

Most credit cards do not have an annual fee, but some may require a certain spending amount to waive it. Debit cards are usually free for account holders, but fees such as joining, annual fees, and card replacement may apply. Banks charge an Annual Maintenance Charge (AMC) on debit cards as a yearly fee for using ATMs, which varies depending on the card issuer and type.Β 

  • ATM Withdrawals

Using a credit card to swipe out cash costs a fee and interest. Debit Cards usually do not charge a fee for cash withdrawals, especially at the users’ bank’s ATM. The amount you have in your account is the limit for ATM withdrawals through debit cards. Similarly, credit cards have a withdrawal limit.


A credit card onlineΒ  has many benefits, like discounts and reward points that can be exchanged for free flights and gifts. Some debit cards also offer benefits like discounts and cashback, similar to credit cards. These benefits attract a lot of users while making their everyday transactions easier.

  • Credit Limit

Credit cards have monthly limits based on the type of card, a user’s relationship with the bank, and their creditworthiness. Debit cards can only be used up to the amount in a user’s bank account, but the bank may also have a daily purchase limit on the users’ cards.Β 

  • Eligibility

Usually, credit cards require certain qualifications like income, established relationships, and credit history. On the other hand, those who have a savings or current account can easily secure a debit card by completing the application process.

  • Interest

Credit cards offer up to 50 days without interest. To avoid interest charges, the users must pay the due amount within this period. A debit card receives the money directly from the users’ accounts, so they do not have to pay any interest. So, a credit card is a postpaid service with interest, and a debit card is a prepaid service and comes with no interest.

  • Security Features

Debit and credit cards have similar security features like SMS notifications, PINs, and OTP. Credit cards often have zero liability insurance for stolen or lost cards based on applicable terms and conditions, while debit cards do not.

  • Usage

Debit and credit cards are used similarly. They work at stores and online, but some places only take credit cards. Paying with credit cards is popular because it’s quick, simple, and secure. It lets users avoid using their savings and earn credit scores. These advantages make customers use credit cards, and some websites only accept them.


Hopefully, the blog has clarified what is credit card and debit card. Both cards have their set of benefits. You can choose one according to your requirements. Additionally, credit cards help build credit and offer rewards but carry the risk of debt. Debit cards allow for budgeting and spending within means but may lack fraud protection and rewards. You need to choose based on personal preference and financial behaviour.

Besides this, you can also opt for a credit card against FD if your credit score is low and you want to improve it.

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