Difference Between Debit Card and Credit Card
12 Jul 2021

Difference Between Debit Card and Credit Card

Wondering what is the difference between debit card and credit card? Find out in this article.

Key Takeaways

  • A debit card is linked to your bank account, and money is instantly debited when you use it.
  • A credit card works like a loan, which you can repay on a fixed, future date.
  • Credit cards usually involve interest payment on late repayments of outstanding bills.
  • Banks offer debit cards as an accessible, complimentary facility, whereas you have to apply for credit cards.
  • You can withdraw cash on both, but you have to pay interest on credit card withdrawals.


Banking transactions are easy and convenient today, thanks to debit and credit cards. With debit cards, the bank debits the money from your linked account when you make a transaction. However, with credit cards, the bank adds the transaction amount to your line of credit and sends you a bill at a later date, giving you plenty of time to make the payment. While the two types of bank cards look the same, there are quite a few significant differences between a debit card and a credit card. Let us learn more about them, starting with their meanings.

What is a debit card?

A debit card is a plastic card that gives you instant access to the funds in your account. Typically, banks provide you with an ATM-cum-debit card to withdraw money at ATMs. You can just as easily use the card to pay for purchases at brick-and-mortar stores or buy products online. Your bank issues you a debit card when you open an account, and the card is linked to your account.

Every debit card comprises a 16-digit unique card number and expiry date on the front side. The reverse side contains the signature strip, along with a 3-digit CVV or card verification value.

What is a credit card?

In look and feel, a credit card is the same as a debit card. It also features a 16-digit card number, expiry date, CVV, and signature strip. However, a credit card allows you to borrow money from your creditor (usually a bank) for a temporary period (30-45 days). During this time, any purchase you make is paid off by the creditor. You have to repay the creditor a partial or complete amount on your pre-determined credit repayment date. Unlike debit cards, credit cards are not linked with your bank accounts. You can have a bank account with one bank, and your creditor could be another bank.

Debit Card vs credit card

Let us now understand what the difference between a debit card and a credit card is.

Transaction type

When you use a debit card, the cash gets ‘debited’ from the account instantly. A credit card allows you to carry out a transaction on credit and is similar to borrowing. The bank that has issued the card makes the payment. The cardholder needs to repay the amount at a later date. If repayment is delayed, you need to pay interest on the amount.

Issuance and fees

Another point of difference between debit and credit cards surrounds issuance. Usually, debit cards are issued for free when you open a savings account. You, however, need to pay annual maintenance charges on debit cards. Banks typically levy a joining fee for issuing credit cards. Therefore, you also have to pay a nominal yearly fee to continue using the credit card each year.


Debit cards are provided as a complimentary facility, and the bank issues you one as soon as you open an account. However, you need to apply for a credit card on your own. For this, the bank asks you to submit your ID and address proof and considers your monthly transactions before qualifying you for the card. It also conducts a KYC process, checks your credit history and source of income before issuing a credit card.

Cash withdrawal

You can use both debit and credit cards to withdraw cash. But with debit cards, you are not charged any interest, and there is no specific monthly limit on withdrawals (but there is usually a daily withdrawal limit). Credit cards allow you to withdraw cash from ATMs too, but you may withdraw only up to a specified monthly limit, and you have to pay interest on cash withdrawals.

Happy shopping with the DBS Bank debit card! Download the app to open your digital savings account instantly and get your debit card!

Can Debit Cards be used as Credit Cards?

Technically, debit cards cannot be used as credit cards since the two cards function differently. With the former, money is debited from your card instantly upon making a payment, whereas with the latter, funds are not debited from your account until the credit repayment date. However, you can use your debit card to pay off your credit card bills.

How do debit cards and credit cards work?

While using both debit and credit cards at retail stores, you need to enter your PIN (Personal Identification Number) to complete the transaction. For online payments using credit vs debit cards, you have to enter the entire 16-digit card number, expiry date and CVV. In addition, you also need to input the OTP (One Time Password) sent by the bank or creditor to your registered mobile number to authenticate the transaction. Once you enter the PIN/OTP, the credit or debit transaction will be completed.


Once you learn the difference between debit cards and credit cards, you can make an informed decision about the right kind of card that works for you. Be it visiting your favourite restaurants or shopping centres or making online purchases, you can do it all with these cards, and without withdrawing cash from your account. Both cards can prove to be extremely helpful in different situations. So reach out to your bank and apply for both.

With the digibank by DBS app, you can open a new saving account in a few minutes! Download the app to get started.

*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.