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What is the difference between credit and debit cards, know the rules related to interest, spending limit

Many people remain confused about what is the difference between debit and credit cards.

Difference between Credit and Debit Card: When you open a bank account, you get chequebook, passbook and ATM cum debit card. When your account gets some time, the bank also offers you a credit card. However, many people remain confused about what is the difference between debit and credit cards. People also take both the things as equal. Let us know the difference between them.

What is Debit Card?

Debit card is a card linked to your savings or current bank account. When you open a bank account, the bank issues a card, which you can use at ATMs and POS terminals to withdraw money or pay for your expenses. The amount is credited or deducted from your debit card automatically and instantly. Banks offer free debit cards and charge a small annual maintenance fee.

What is a credit card?

Credit card is another type of card through which you can borrow money from a bank or financial institution. The bank also puts a credit limit in it. This limit is worked out on the basis of your income and is increased from time to time. The bank bills your credit card expenses and you have to pay the same by the due date. If you are not able to pay off the credit card loan, the bank charges an interest rate on the money taken.

difference between the two

bill, account statement

A person who has a credit card is sent a bill of his expenses every month. The bank issues the bill, which contains the minimum and some outstanding amount. In case of debit cards, the account holder can view the expenses by directly accessing the savings account.

link card

The debit card is linked to your savings account, while the credit card is linked to your financial institution or issuing bank.

spending limit

Generally, credit card companies fix credit limits. And you cannot take more than that credit limit. In case of debit cards, banks fix daily cash withdrawal limits and POS spending limits.


The credit card issuer charges an interest rate if the person has not been able to repay the amount on time. In case of debit cards, money is not borrowed on credit, hence no interest is charged.

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Shehnaz Ali
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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