What is the difference between a credit card and a debit card?

i understand that a credit card is money that you do not have and debit is money that you do have, but do you have to pay interest in both? is one of them like paying with invisible cash? lol|||A debit card deducts money directly from your checking account, usually with one or two days, and it will be the full amount of the purchase. With a credit card you are using borrowed money and you pay that back at the end of the month or in installments. You will pay no fees with a debit card.|||A credit card you pay after you purchase something and pay for later


A debit card is tied to your checking account and money is instantly withdrawn from you checking account. If you use a debit card make sure the bank shuts off the automatic overdraft protection or you will rack up overdraft fees if you happen to not have enough money in the account. The card will be declined at the merchant and the Bank will not take $25.00+ every time you don't have enough money in your account. That would be the invisible money you see flying out of your account.


There is no interest associated with a debit card as you are paying instantly.|||You do not have to pay interest on a debit card because it is using your money that is already in your own established account; whereas a credit card is like using "borrowed money" that you have to pay back with interest. I personally got rid of all of my credit cards because of the high interest attached to them, and the ease of use that can lead to over-spending. My personal choice is a debit card through my local bank.|||You do not pay interest on debit purchases. You are correct in saying it is like paying with invisible cash. The beauty of debit is that you do not have to pay the money back. It is money you already have in your pocket. (ok well bank account. not really your pocket.) The other great thing about a debit card is that, if you have a VISA or Mastercard logo on it, you can use it as a credit card as well. Meaning that , yes, the money still comes out of your account, but you have all the protections of the Visa or Mastercard credit card companies. That is why they always ask you "Credit or Debit" when you make a purchase. Forget the actual credit cards. Just use your debit. Too many people have gotten themselves way too far in debt using credit cards. They pay billions of dollars in interest and can barely make the minimum payment. Do not go down this road. If you are asking this question, I assume you are pretty young. Please learn about all the dangerous pitfalls of personal finance before jumping into the world blindly. I do not say this with the intent of demeaning you. I just want people to avoid the pitfalls that I have been through and help them to avoid my mistakes. Please read a couple of books. They are exceptionally insightful. The first is a book called The Millionaire Next Door by Tom Stanley. This is a study of how people who have accumulated wealth and kept it got to be that way. The people who are the typical millionaire may surprise you. They are not the ones who live in the 8 million square foot house and have planes and boats and cars ant toy. Yes there are some like that, but the typical millionaire drives a late model car and lives in a modest home. The other book is called the Total Money Makeover by Dave Ramsey. This is a great book on how to set your life up from a personal finance perspective. You must live on less than you make, avoid debt, and invest and save. You must save for things instead of just running out and putting them on a credit card and going into debt.


If you are younger, as I suspect, these books will do wonders for you in your financial life. You may not have much now, but in the future, you will be very well off. Please read them and get yourself set up. I wish I had read them 30 years ago. My life would be so much different now.


Please read the books. Get yourself set up on a good financial plan. Talk to people and educate yourself. Talk to old people with money who have kept it. Do not get financial advice from your broke in laws. I do not take financial advice from people who are broke. Talk to your banker. Find a good financial planner and talk to them. Dave Ramsey's website has good leads to people who can help you. It does not cost anything either. They are people who understand and follow his financial advice. Get educated. Live on less than you make. Pay cash (or debit) for things. Have a rainy day fund. Invest and win. Have a plan and stick to it and win.


Good luck. I wish you the best.


Debt is dumb. Cash is king. Debt is normal. Be weird.|||credit card allows you to spend as much as you want and then the company bills you at the end of the month. debit pulls money directly from your account.


if you are looking to use one, i recommend a debit so you cant put yourself in debt. if you dont have money you will be declined.|||I don't think there's an interest charge on debit cards as long as you use it. There is only interest rates on credit cards if you don't pay the entire bill when it comes.|||Your debit card does not charge interest because it is your money. But they do let you spend a little extra but charge you $35 per transaction (ouch!)