Comparison Chart

BASIS FOR
CREDIT CARD DEBIT CARD
COMPARISON

Meaning Credit card is Debit card is issued by a bank to

issued by a bank or allow its customers to purchase
any financial goods and services, whose
institution to allow payment is made directly through
the holder of the the customer's account linked to
card to purchase the card.
goods and services
on credit. The
payment is made by
the bank on the
customer's behalf.

Implies Pay later Pay now

Bank Account The bank account is The bank account is a must for
not prerequisite for issuing a debit card.
issuing a credit
card.

Limit The maximum limit The maximum limit of

of withdrawing withdrawing money will be less
money is than the money lying in the saving
determined bank account.
according to the
credit rating of the
 BASIS FOR
CREDIT CARD DEBIT CARD
COMPARISON

holder.

Bill The holder of the There is no such bill, the amount

card has to pay the is directly deducted from the
credit card bill customer's account.
within 30 days of
every month.

Interest Interest is charged No interest is charged.

when payment is
not made to the
bank within a
specified time
period.

Definition of Credit Card

A credit card is a type of facility which allows its customers to purchase

goods and services on credit, and the payment is made by a third party
(financial institution) on his behalf immediately. The customer has to
pay the credit amount to the third party at a later date. In this regard,
every month, the financial institution sends a bill to the card user for the
amount paid on his behalf. Usually the user is allowed a credit period
of 30 days within which he can pay the amount, afterwards, interest is
charged at a prescribed rate.
Definition of Debit Card
A debit card is a type of facility provided by the banks to its customers to
purchase goods and services against his own saving bank account. So,
whenever the transaction takes place, the amount is deducted from the
customer’s account. Here, the bank charges a nominal amount every
month for the use of the card. It can be used for purchasing goods,
transfer of funds, internet banking services, deposits, etc. Nowadays,
ATM cum debit card is also available in the market which allows you to
avail all the facilities of the ATM card.
Similarly like a credit card, it is also made up of plastic with a magnetic
strip which contains all the basic account details of the customer.
Key Differences Between Credit Card and Debit Card
1. For issuing the Credit card, the bank account is not the
requirement of the bank, but in the case of Debit card the customer
must have a bank account.
2. The major difference between Credit Card and Debit Card is that,
in Debit card the amount is withdrawn from the bank account
linked to it, while in the Credit card the amount is not withdrawn
from the account.
3. In Credit card the bank charges interest, whereas in the Debit card
no interest is charged.
4. The maximum limit of withdrawal in Credit card depends on the
credit rating while the maximum limit of withdrawal in Debit card
depends on the cash balance in the account.
5. The rate of overdraft facility is low on the Credit card, but the rate
of overdraft facility is high in case of a Debit card.