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

What is the difference between debit card and credit card?
And which one is better to have?
thanks

A debit card is spending money you already have in the account

A credit card is borrowing money up to an agreed limit with fees and interest payments attached.

Reply 2

Amin7

Original post by StriderHort

A debit card is spending money you already have in the account

A credit card is borrowing money up to an agreed limit with fees and interest payments attached.

So a debit card is better for everyday use?

Reply 3

StriderHort

Original post by Amin7

So a debit card is better for everyday use?

Yep, no fees attached. You're spending your own money, not the banks.

Credit Cards can be handy to have. You might want to make a large purchase and spread the cost out a bit and you tend to get better consumer protections buying stuff. It can be comforting to know you've got quick access to credit if you need it.

The main problem with them is people tend to forget they're not using their own money, and start carrying over a larger and larger balance every month and then the interest fees start to pile up.... (Generally you don't pay a penny if you pay off the credit card in full each month)

(edited 3 years ago)

Reply 4

IWMTom

Original post by StriderHort

A debit card is spending money you already have in the account

...borrowing money up to an agreed limit with fees and interest payments attached.

Unless you go into overdraft, in which case the latter applies.

Reply 5

StriderHort

Original post by IWMTom

Unless you go into overdraft, in which case the latter applies.

True, but I'd consider that a borrowing feature of the account itself rather than the card.

Reply 6

IWMTom

Original post by StriderHort

True, but I'd consider that a borrowing feature of the account itself rather than the card.

Just felt like being awkward for no reason :P

Reply 7

StriderHort

Original post by IWMTom

Just felt like being awkward for no reason :P

Are you pining to fill the Nadim Gap? :tongue:

Reply 8

IWMTom

Original post by StriderHort

Are you pining to fill the Nadim Gap? :tongue:

No comment

Reply 9

Emma:-)

Entertainment Forum Helper

Original post by StriderHort

I agree

Reply 10

IcEmAn911

Like others have mentioned, a debit card is linked to your bank account with 'existing funds' and a credit card is simply a set amount of credit given to you to use and pay off according to the terms and conditions set by the lender to avoid penalties and fines i.e. pay in full at the end of each month or minimum payment at the end of each month.

They both have their own uses and it's difficult to say which one is better than the other.

For me I have a few different bank accounts/debit cards and one credit card which initially came with interest free purchases for about 64 months, which was nice to have as it meant I can pay the minimum amount off each month without any penalties and interest charges. But I always try and be careful with the amount I spend and not let it build up too much. Plus a credit card is also useful for online purchases because there is what is known as Section 75 which allows me to request a reverse money charge back on companies like airlines for example who are taking a while to issue me refunds due to Covid-19 or if a company goes into administration. I believe debit cards have something similar, but I'm not 100% sure on that as I've never tried raising a chargeback case with banks.