Credit Cards vs. Debit Cards

  • On : June 9, 2015

It’s increasingly rare these days that anyone ever has cash on them. That’s because most of us now rely on plastic to make our purchases, whether it’s something small like lunch or something much bigger like a new television. We’ve all become accustomed to simply whipping out a plastic card at the register.

However, there are two different types of plastic we can use, both of which are notably different from each other. These are, of course, credit and debit cards. Let’s look at their key differences now.

Cash Flow

Debit cards are linked directly to your bank account. Each time you make a purchase, your bank debits the money from your checking account, hence the name. This makes debit cards a great way to keep a lid on any problems you may have with overspending. On the other hand, credit cards can let you carry around a balance, if you like. The company will charge you interest for that luxury though and you’ll have to pay it off in monthly installments. This is one reason credit cards can be both risky, but also very helpful.


Another advantage to using a credit card is how much easier it tends to be to report fraud and get your money back. With debit cards, you have to be sure you’re reporting the issue immediately. Even then, it could be weeks before you get your funds back.

Keep in mind, too, that if your bank looks at debit card purchases as crash transactions, you may have no argument when goods or services go undelivered.


As we mentioned before, the main luxury of using a credit card is the fact that you can essentially spend money you don’t yet have and simply pay it off over time. However, in an effort to compete with one another, credit card companies offer pretty generous rewards to their customers. This can range from things like frequent flyer miles to cash back rewards.

While both have their place in your wallet, credit and debit cards are different enough that you need to be careful how you use them and for what.