Pros and Cons of The Debit Card vs. Credit Card

There is confusion among consumers over use of a debit card vs a major credit card. Which one is best or safest to use for purchases in department stores? Which is best to use online?

When considering debit card vs. a traditional credit card you are comparing different forms of payment. You may choose to use one method or find a combination of both cards will be more useful.

You may think of a debit card as the bank card you use to take money from your checking or savings account through an ATM.

However, when using cards to make purchases a debit card often refers to temporary cards widely available in many stores that can be funded with the amount of cash you choose.

Use of a debit card when shopping is the same as using cash without the security risks of carrying large amounts of cash on your person. When shopping online, a debit card can provide a level of security not always present with use of credit cards or bank cards.

Disadvantages of Debit Cards

With a debit card you are spending money in advance of your purchase. This is not a buy now – pay later method of shopping.

If there are no funds left on the debit card, you cannot buy anything with that card. If you unwisely write your PIN number on a debit card and then lose the card, you will probably lose the money in that account as there is no legal protection that will give the money back.

A debit card will not be useful in building or rebuilding a credit rating. Because they are pre-funded, debit cards carry no risk of non-payment and are not reported to credit agencies.

Credit Card Advantages

If you use a credit card to make a purchase you may not have the money available today to pay for the purchase. You can stretch payments over several months and buy items this month that you can’t afford until next month.

There is a grace period (usually 21-25 days) that allows you to pay the purchase in full and incur no interest fees on your card.

This grace period makes a credit card valuable for someone good with budget planning as online tracking tools of leading credit lending banks allow you track your spending day by day.

Some lenders even allow you to sort purchases by category or to choose which purchase should be paid off first.

A credit card is similar to a loan. You must be approved by the lender and the spending limit attached to your credit card is the amount of the loan available to you.

There are some details to be aware of as using that total spending limit can damage your credit rating. The rule of thumb from financial experts is to use no more than 50% of the available spending limit on your credit card.

Using a credit card wisely is the best tool for building a new credit file or for rebuilding credit damaged in the past. Banks report payment activity on credit cards monthly to the three credit rating agencies.

Disadvantages of Credit Card Use

The argument of “debit vs. standard cards” takes on new meaning if you are not a financially responsible person. Credit cards require you to be aware of your purchases and how they affect your account balance.

Using a credit card requires self discipline. It is so easy to see a luxury item you want to buy and whip out a credit card to pay for it. Impulse buys are one reason so many consumers run into serious problems with credit card debt.

The holiday season is responsible for many consumers going into debt with their credit cards. In the excitement of a season when gift giving is expected, it is easy to forget the bills that will come next month.

If you buy without a budget in mind you may find yourself paying off that debt long after the fancy toys are abandoned and the gifts forgotten.


When examining the features of a debit card vs a standard credit card for your personal shopping keep your spending habits in mind.

If you are financially responsible and cautious about spending, a credit card provides a safety valve for emergencies and for spreading large expenses over a period of time.

If you dislike worrying about money and bills, aren’t good at making payments on time and have a tendency to buy on impulse, the debit card may be a safer choice for you.

P.S: Make sure to read our guide on secured cards as well if you have few minutes over!