Someone explain credit cards to me please

Credit cards are topped up with 'borrowed money'. So you have to pay it back.

They're advantages are various types of payment insurance (or whatever tf it is called, I don't remember)... so if the money you spent with a credit card is the result of a scam, it is insured, and you will get it back (for example). So, credit cards are good if you're planning to travel abroad to risky places where lots of locals working in restaurants try to steal your card details to pay for their house refurbishments or new furniture (these are pretty typical scenarios).

But the disadvantages are that if you're shyt with finances, you'll be even more shyt with finances when you get a credit card, and end up bankrupt... because the interest rate is something like 20% or more usually. It is 0% if you pay it back within a certain time period. If you don't pay it back within that time period, then it's down the rabbit hole of indentured servitude.

I've never heard of a company that only accepts credit cards as payment...

Use moneysavingexpert to find out more about credit cards

I’m embarrassed to say that I’m 20 years old and actually don’t know what a credit card is/what it’s used for/how it’s different from a debit card.

I’ve been using debit to pay for items for years now and I’ve come across a website that only accepts credit cards for payment. I have no idea where to begin with this. Is it something that I can just apply for with no extra costs? Can it be used in the same way as a debit card?

Which website is that? A credit card is where u purchase stuff on credit, i.e. using borrowed funds. No company would specify what kind of card you can and can't use

I see! How does this actually work? Like say if I applied for a credit card (I’m not sure if this is a simple process in itself or if I need like a background check or something lol), can it be used like a debit card? Like do I actually have to deposit money into it first and then I can use it to pay online? I’m not familiar with this whole concept of borrowed money outside of my student debt lmao.

I see! How does this actually work? Like say if I applied for a credit card (I’m not sure if this is a simple process in itself or if I need like a background check or something lol), can it be used like a debit card? Like do I actually have to deposit money into it first and then I can use it to pay online? I’m not familiar with this whole concept of borrowed money outside of my student debt lmao.

Shockingly I've never actually had one. I have other 'security measures' in place on my accounts, that largely make the extra perks of credit cards redundant to me. I've never had any money scammed off me, or stolen in any other way by strangers (not counting family bs crap and drama).

Now with Brexit though, I might consider getting a credit if I plan travel to Europe. Credit cards do not normally incur additional charges abroad for their use (whereas debit cards sometimes/often do). Don't know yet.

To my understanding, credit cards work almost identically to debit cards. Except you do not 'deposit' money into them. The card is linked to your main bank account in some way. Your bank gives you the card with say £5000 on it. Then you use it like a debit card. Then you have to pay the money back within a month. You can set up direct debit to do this, so it gets paid back automatically without you having to remember it.

Plenty places use credit cards as proof of age. Companies also may only process certain types of card, Visa, Mastercard ect.

Plenty places use credit cards as proof of age. Companies also may only process certain types of card, Visa, Mastercard ect.

As proof of age maybe, but they certainly wouldn't turn away a payment from a debit card. That's absurd. Visa and Mastercard also issue debit cards...

Credit cards have an advantage for things like hotel bookings and car hire. In some cases, hotels and car hire companies put an authorisation hold for a significant amount on your card. On a credit card where you have decent amount of spare credit available, this isn't generally a problem (it prevents you from spending money that's not yours). On a debit card it can reduce your available balance (it blocks you from spending money that is yours) and hence causes problems.

I mean they may only accept Visa or Mastercard as all merchants don't accept all cards and do make choices about what cards they accept for their own reasons. Many of them charge different transaction %s so there is competition.

Debit cards being accepted online/phone/stores is still pretty recent compared to Credit cards btw, for a long time they were the only option and 'Bank' cards were for ATMs and bank branches only. Merchants accepting early debit Switch/Solo cards didn't always have the same guarantee of getting paid as with Credit Cards so didn't take them.

Yes but the OP's question wasn't about whether places accept cards from certain providers but whether they distinguish between credit and debit cards when accepting payment. And never have I encountered that in nearly 10 years of using a debit card for most of my transactions

I mean they may only accept Visa or Mastercard as all merchants don't accept all cards and do make choices about what cards they accept for their own reasons. Many of them charge different transaction %s so there is competition.

Debit cards being accepted online/phone/stores is still pretty recent compared to Credit cards btw, for a long time they were the only option and 'Bank' cards were for ATMs and bank branches only. Merchants accepting early debit Switch/Solo cards didn't always have the same guarantee of getting paid as with Credit Cards so didn't take them.

I have encountered it in 20+ years of using both and working for banks and retailers. *shrug* It might be rare but it's not as absurd as you appear to claim.

The last time I came across a business that accepted only one of Visa or Mastercard ("Access" was about 30 years ago. (It was a small business that sold TVs that my parents used to deal with. I can't remember the exact reason why they took one and not the other, but they had a good reason for it.)

The situation may well be different in other countries, but in the UK I'd be surprised to find anywhere these days that would only take one or other of Visa and Mastercard and not both.

(If you want to throw American Express into the mix, then there are a lot of business that won't accept Amex. That said, Amex is more commonly accepted than it once was.)



Debit cards are very much the new kid on the block, while credit cards have been around since the 1960s. I think Switch and Solo relied on online authorisation and hence can't be used in some situations, whereas credit cards can be used offline (originally using paper vouchers and carbon paper!)