Difference Between Credit and Debit Transactions

Using cards to make purchases is considered easier than cash transactions due to several reasons including ease of access. The two main types of cards include credit cards and debit cards.

Credit Transactions vs Debit Transactions

The main difference between credit transactions and debit transactions is that credit transactions can be used to spend from existing accounts while debit transactions can be used to spend money after borrowing the same from banks. This difference owes its existence to the mode of spending and the way the user limits the transactions. Both the transactions are equally feasible for making offline as well as online purchases.

Credit Transactions vs Debit Transactions

Credit transactions can be made using credit cards. They ensure easy access to the money stored in the accounts. It is an easy cashless way to make purchases.

Debit transactions can be made using debit cards. Such transactions suit people who do not wish to spend money from existing accounts.

Comparison Table Between Credit Transactions and Debit Transactions

Parameters of ComparisonCredit TransactionsDebit Transactions
DefinitionThey help spend money from the current account or savings account. They help spend money directly taken from banks.
Additional ChargesInterest is not applicable on credit transactions. Interest is applicable if the payment defaults or deadline is exceeded in paying debit card bills.
LimitationsCredit transactions allow the unlimited expenditure. Debit transactions do not allow unlimited expenditure as the bank provides a limited amount.
Types AvailableThe variety of credit cards is limited. Debit cards have numerous types and they vary based on the type of spending.
Eligibility of UserAnyone can make credit transactions after a specific age. A user should be possessing a certain minimum income to make debit transactions using the designated card.

What are Credit Transactions?

Credit transactions allow a user to make use of a credit card to access saved money. This money can be accessed from the accounts the person has.

Most credit cards allow a one-month time period before the customer is required to make up for the balance amount. The total sum includes the accumulation of outstanding balance and purchase amount.

Due to the prevalence of cyber frauds and tracking, banks and other related agencies should avoid saving the credit card details of users while making online transactions.

What are Debit Transactions?

Debit transactions are made for spending a predecided amount of money. The source of money is a bank in this case and the spender has to pay back the bank before the limit is exhausted.

Debit cards are much prevalent due to the wide variety available. A checking account is also required for the purpose of making debit card transactions.

Overall, debit transactions suit regular spenders as the user can easily keep a track of expenses incurred and sums paid back.

Main Differences Between Credit Transactions and Debit Transactions

  1. Credit transactions offer limited variety to the person making transactions while debit transactions are diversified due to the number of cards available for different purposes.
  2. There is no specific eligibility criteria for making credit transactions. On the contrary, people cannot make debit transactions unless they reach specific targets of income and other financial stability parameters.
Difference Between Credit and Debit Transactions


Credit transactions, as well as credit transactions, have their own pros and cons in the economic industry. It is essential to have complete knowledge regarding the benefits and subsequent risks.

One can become a spendthrift in no time if either the credit card or the debit card is put to lavish use. Such an application of technology to cashless use of money proves fruitful while making big purchases.


  1. https://link.springer.com/article/10.1007/s10603-009-9098-5
  2. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1538-4616.2008.00107.x
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