Comparison: Credit Cards vs Debit Cards


My friend told me that his credit card is better than my debit card. But is that true? Is there even a difference?

Yes, there are a couple of differences.

Well then, what are they?

First of all, for credit cards, you borrow the money from the bank. But with debit cards, you use your own money to make the purchases or for ATM withdrawals.

And also, with credit cards, you have to pay interest if you don’t make your payments in full for the month, or you don’t make your payments at all. But with debit cards, since the money is coming from your own account, you will not have to pay any interest.

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Yay!! But is there a difference in the fees that they charge?

Yes. With credit cards, many of them will have an annual feet. But with debit cards – most of them do not.

Yay! But, are there any other differences?

Yes, there are. With credit cards – well, at least with most of them – you can earn points, miles or cash back that can be redeemed for cash or goodies. But with debit cards, usually you do not earn any points or other form of rewards.

You talked to me about all the differences, but which is better?

Well, if you’re disciplined and you make your monthly payments for the credit card – and make them in full – then credit cards are probably better for you, because you also get free credit and you can get rewards.

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But if you don’t think that you’ll be able to make your monthly payment in full, and you don’t think you’re that disciplined, then a debit card is better for you.

Thank you very much for telling me the difference between a credit card and debit card, Wall Street Willy.

You’re welcome, Sooper Cooper. Remember, finance is your friend!

Podcast: Credit Cards vs Debit Cards

Credit vs Debit Card
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