But when it comes to what each card does, there are distinct differences. Having both is perfectly fine, as they serve different purposes. But if you’re trying to decide which one is right for you, then it’s good to know some of the pros and cons of both.

What’s the Difference?

The most basic difference between a debit card and a credit card is how they affect your bank account. 

Debit cards allow you to spend money by drawing on funds you have deposited at your bank, but can’t exceed what you have in the account without penalty.

Credit cards allow you to borrow money from the card issuer up to a certain limit, but that money has to be paid back within a certain period of time

Building Credit

One major benefit of a credit card is the ability to build credit, something that a debit card doesn’t offer. You need credit history to make major purchases like a car or house.

That said, this can go both ways. When you get a credit card, its use is usually reported to the major credit bureaus — TransUnion, Equifax, and Experian — and therefore shows up on your credit reports.

So, if you are making the monthly credit card payments on time, then you can build good credit. If not, it will lead to bad credit.

While a debit card doesn’t help you build credit, if you make a mistake like overdrawing the account, it won’t hurt your credit either.


There is some convenience that a debit card offers over a credit card.

Instant access to your money for one. While it varies by merchant and credit card machine, you often get to skip using a PIN or showing a Photo ID to make a purchase with a debit card. Also, because you’re spending money you already have, there’s no worry about having to pay it back later.

Debit cards also typically have fewer fees than credit cards. 

Credit card fees: Fees: interest (APR), annual, late payment, foreign transaction, balance transfer, cash advance.

Debit card fees: Fees: monthly, overdraft, ATM, foreign transaction.


Credit cards typically offer more rewards than debit cards do.

Many offer rewards on purchases with things like Cash Back programs and points or miles. Additionally, many credit cards come with a sign-up bonus in the form of cash.

If you don’t have a strong credit history, you might not be able to get a rewards card right away — but as you build your credit, you’ll probably qualify for more and more.

Fraud Protection

Credit cards offer a lot more protection against fraud than debit cards do.

In the case of a credit card, the most you'll be liable for if your credit card is stolen is $50. Of course, you need to report the loss as quickly as possible.

For debit card users though, that $50 limit is only if the loss is reported within 48 hours of discovery. After 48 hours, your liability spikes up to $500. After 60 days, there is no limit.


In the end, having both a credit and debit card is perfectly fine as both serve different purposes. But, while a credit card offers more security and benefits, it also comes with significantly more risk and responsibility than a debit card.

Take some time to determine which option is best for you based on your own spending habits.