Debit vs Credit: Difference and Comparison

We live in an online world where everything happens completely online. In all our transactions, everything happens with the help of a simple card. There are two cards that can be used for paying money, and they have their difference.

Credit and Debit are those two cards that are used by many people around the world. 

Key Takeaways

  1. Debit transactions increase asset or expense accounts and decrease liability or equity accounts. In contrast, credit transactions do the opposite by decreasing asset or expense accounts and increasing liability or equity accounts.
  2. Debit entries appear on the left side of an accounting ledger, while credit entries appear on the right side, adhering to the double-entry accounting system.
  3. Debit and credit transactions impact financial statements in various ways, with debits increasing the reported expenses and credits increasing the reported revenues, thus affecting the overall profitability of a business.

Debit vs Credit

The difference between Debit and Credit is that in debit, the amount will be deducted from your side, which you use to pay for some of your needs, and it can be either in shops or online sites. Credit is used for paying but in a different way. Here the money will be given by the bank, and you have to pay it within a limited time. 

Debit vs Credit

Debit is a card that is used by many people, and it is used for paying for something that we bought at shops or online sites. The word debit insists that if we use this, the amount will be transferred to some other person.

We can check the debited amount always in our bank statement or the book given to us so that we can know the debited transactions. Credit is a card given by the bank for your purchases, and you have to return the money within a limited amount of time.

If somebody adds some money to your account, it will come as credit money. It will even be reflected in your bank’s statement. It will be marked with a different color so that you can identify the difference between them. 

Comparison Table

Parameters of ComparisonDebitCredit
PurchaseYou will use this instead of paying with cashYou will borrow money from the bank and will return it within a certain amount of time.
Credit historyNoYes
InterestNo charge on interestYou will be charged some amount of interest
Online TransactionYesYes

What is Debit?

Debit means the amount will be spent when you do shopping at some offline stores or online sites. You can use your ATM card for this purpose. You can use the one that has a written debit card on it.

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When you use your debit card for this kind of online purchase, the amount will be deducted. And it will be marked on your bank’s statement as well. The numbers will be represented in red color.

You can use it only when the shop has the swipe machine with them. But you have to be very careful while using your debit card for online transactions.

Because many hackers might hack all your information and will steal your money, their main motive is to use the one-time password that comes to your mobile, and then they will use it to steal everything you have in your account.

Even when you use your debit card at ATM centres, you have to be very careful and keep your PINs secure. After you complete everything at the ATM, don’t forget to take your card back.

Once you miss your card, freeze it immediately using your bank’s customer care number. Or else people will steal all your money in one go. Do not share any information on your cards, like PINs and ATM card numbers. It will be easy for others to take your money. 

debit card

What is Credit?

Credit is the amount that will be added to our account by others. It is the amount that will be directly credited to our bank account. Sometimes we even get messages about that as well.

Even credit cards are very famous nowadays and are available everywhere. Many banks are offering credit cards for their customers. But it all comes with an agreement.

Once you fail to follow the agreement or cross their limitations, then you have to pay the price for that, which could depend on how much money you have on your credit card.

This is the money that will be given by the ban, and you have to use it within a limited time. And once the time gets over, you have to pay back the money within a limited time. 

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You have to be very careful in maintaining your credit and the statements that come with that. Any discrepancies will ask you to pay the price later. You should not share your personal information with anybody that comes with your bank.

You can’t trust anybody with your bank accounts, and you have them maintain them safely. Once you face any difficulties with your account, try to freeze your card the moment you find something dangerous. It will help you to secure your money. 

credit card 1

Main Differences Between Debit and Credit

  1. A debit is a card used by people to purchase their items from a store. On the other hand, credit is a card given by the bank, and you have to use the return back the money later.
  2. There will be no credit history on your debit card statement. But there will be a credit history in your credit card statement.
  3. Debit cards will not hold any interest in your account. But credit cards will deduct some money based on interest.
  4. A debit card can be used on any online transaction by following all the safety measures. Likewise, credit cards can also be used on any online transactions.
  5. The amount debited will be marked in red color. On the other hand, the amount that is credited will be marked in green color.
Difference Between Debit and Credit

Last Updated : 07 August, 2023

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25 thoughts on “Debit vs Credit: Difference and Comparison”

  1. The article effectively communicates the distinction between debited and credited amounts, and the importance of understanding the financial implications of each card transaction method.

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  2. The article effectively outlines the financial implications of debit and credit transactions, making it easier to comprehend the impact on financial statements and business profitability.

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    • Indeed, the article has highlighted the need to exercise caution when using debit cards. The information about online security and protecting PINs is particularly relevant.


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