{"id":14528,"date":"2025-12-15T12:36:00","date_gmt":"2025-12-15T18:36:00","guid":{"rendered":"https:\/\/www.discover.com\/online-banking\/banking-topics\/?p=14528"},"modified":"2026-02-04T12:51:28","modified_gmt":"2026-02-04T18:51:28","slug":"credit-cards-vs-debit-cards-explained","status":"publish","type":"post","link":"https:\/\/www.discover.com\/online-banking\/banking-topics\/credit-cards-vs-debit-cards-explained\/","title":{"rendered":"The difference between debit cards and credit cards"},"content":{"rendered":"\n

Have you ever wondered about the uses of a debit card vs. a credit card? It\u2019s likely you have both types of cards in your wallet at this very moment, and you\u2019re given the option to choose one of them\u2014sometimes in a matter of seconds\u2014every time you make a purchase. Still, you have lingering uncertainty about whether you\u2019re making the best choice\u2026 and that same question pops into the back of your mind every time you buy something: \u201cShould I use a credit card or debit card?\u201d<\/p>\n\n\n\n

Being uncertain about the difference between a credit card and debit card or the best time to use either is a common dilemma. The better you understand the benefits of each\u2014beyond the fact they offer a way to access money without having to carry cash or a checkbook around\u2014the savvier a spender you\u2019ll become.<\/p>\n\n\n\n

Debit card vs. credit card: Managing revolving credit vs. a bank account balance<\/h2>\n\n\n\n

Credit cards and debit cards both offer a convenient way to pay for things, but they work quite differently behind the scenes. As a result, they each appeal to different types of consumers, says Lou Haverty, a former financial analyst and founder of a career-advancement website for accountants and financial professionals. <\/p>\n\n\n\n

A credit card is a form of revolving credit. When you spend with your credit card you are borrowing, and you pay interest if you carry a balance, Haverty says. A debit card, by contrast, is linked to a bank account\u2014usually a checking account\u2014and the money is withdrawn as soon as you make the transaction, typically using a PIN.<\/p>\n\n\n\n

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One difference between debit and credit cards is that with a credit card, the exact amount you can spend depends on your credit limit and the balance you are currently carrying on the card, Haverty explains. If you have a $1,000 credit limit and a $600 balance from previous purchases, you can continue to charge an additional $400. If you\u2019ve reached your credit limit, you won\u2019t be able to use the card for more purchases until you pay off at least part of the balance. You owe a minimum payment each month.<\/p>\n\n\n\n

When considering a debit card vs. a credit card, know that most credit cards carry an interest rate, expressed as an annual percentage rate (APR)<\/a>, which is essentially what you pay to borrow. You\u2019ll have to pay interest on that $600 balance mentioned above if you carry the balance from month to month. \u201cCredit cards require a responsible approach to your personal finances because you have the ability to spend beyond what you might have as cash in your bank account,\u201d Haverty says.<\/p>\n\n\n\n

Another difference between debit and credit cards is that with a debit card, funds are pulled directly from the balance you have in the checking account to which the card is linked. In a traditional account setup, you can\u2019t spend more than what you have in the account, which helps reduce the chance of racking up debt. If your account offers overdraft protection, you may be able to spend more than your account balance by leveraging funds from a different, linked bank account.<\/p>\n\n\n<\/div>\n\n\n

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\u201cCredit cards require a responsible approach to your personal finances because you have the ability to spend beyond what you might have as cash in your bank account.”<\/p>\n