When to Choose a Debit Card vs a Credit Card!

Which card should you choose, a credit or debit card, there is no correct or wrong answer for this dilemma. All that is relevant is if you have considered everyone’s advantages and drawbacks. Credit cardholders, however, complain that the incentives like cashback, miles, and others are lacking.

Thanks to the ease of making online and offline transfers, debit cards and credit cards allow you to travel or buy without needing to hold cash in your pocket. There are some critical distinctions between credit cards and debit cards, but they are both physical cards for making cashless transactions.

By drawing on funds they have deposited at the bank, debit cards allow bank clients to spend money. Credit cards allow customers to borrow money up to a certain amount from the card issuer to buy products or withdraw cash.

How do debit cards work?

Your debit card resembles a plastic check: it removes the money straight from your account anytime you make a transaction. Thus, your transaction may decline if you withdraw ₹15000 from your account, but you only have ₹7500.

You won’t have to pay interest because money is deducted from your account as you swipe. However, if you withdraw more money than on your record, you might have to pay overdraft charges.

Debit cards act as ATM cards enabling you to withdraw cash from your bank account directly.

How do credit cards work?

A credit card is like a loan: once you open a credit card, a particular line of credit has been accepted.

Often known as a credit cap/limit, the amount you can use before you “max out” your card is a line of credit. Your credit record and income determine the credit limit. Better the record, the more trust your lender will have in you and higher the limit.

You will get a monthly bill for the money you spent. Although you have to pay the minimum amount by the due date, you will have to pay interest on the remaining balance. Since the rate of interest on credit cards are typically incredibly high, it is prudent to pay your dues in full every month to avoid interest rates.

A Debit Card vs a Credit Card: Uses, Benefits and Fees

Below Are Specific Uses, Drawbacks and Charges That Cards Have.

Regulation On Spending

Debit cards notify you of the balance of your deposit and do not run on the credit line. Overdrawing from your account is the only way to fall in debt with debit cards. Credit cards can only avoid debt if the balances are paid completely every month. It is harder to track the money you spend on a credit card than on debit cards in contemplating it all.

Rewards and Benefits

It can be challenging to locate a debit card that has a robust premium scheme, while rewards and benefits are the standard features of the credit card. Banks earn greater profits from credit cards, meaning that they are ready to provide competitive incentives to enable consumers to use their cards more often.


Be smart to verify the prices of cards, fees and hidden charges before you make your request when applying for a credit card. You should not be surprised if there is a list of different credit card fees for your use. Examples include, but not limited to, late payments, cash advance charges, international transaction fees in addition to the interest charges. Debit cards are not, on the other hand, subject to several charges.

Security From Fraud

RBI provides specific guidelines for determining whether consumers are liable for transactions involving fraud. Both of the cards in India are protected with a two-layer authentication process. There is little to think about until the specifics of the card are exchanged with everyone. It is challenging, considering both cards have identical authentication processes, to figure out which one is better for use.

Which Option To Choose?

If you are paying for car hire, hotel lodging, air ticketing, car fueling, recharging, etc., then use credit cards, because the dealer can put funds on your card. Some of these transactions will be rewarded. You can use debit cards to save money for contingencies in places where businesses charge a certain percentage for the use of credit cards.

Conclusion: If you are prepared to use only one card for all your transactions, the advice will be to weigh all the benefits and drawbacks of each card and pick the right one that suits you. When you find you have no control over your spending or want to escape temptation, debit cards are safer.