10 Key Differences Between Using a Debit Card & A Credit Card


Last Updated on 2021-10-24 , 12:46 pm

The usage of both debit and credit cards are popular in Singapore as they do make things so much easier.

Especially for those who want to purchase items without digging around for cash and coins.

With the ongoing conversation to move towards a cashless society, it is inevitable that usage of cards will rise over time.

What are the key differences between using a debit card and a credit card?

How does it affects the way we pay? Let’s take a look at 10 key differences.

1. What does it all mean?

Debit Card: When you use a debit card to purchase something, money is deducted from your bank account immediately.

Credit Card: When you use a credit card, your credit limit for the card is reduced and you owe the bank the amount you have spent.

2. What is your spending limit?

Debit Card: You can only spend what you have in your bank account.

Credit Card: You can spend up to your credit limit, which is usually a few times that of your current salary.

3. What is the mode of Payment to the bank?

Debit Card: Nothing – You pay with your own money.

Credit Card: You need to pay the bank later (usually within 30 days).

4. Is there interest charged?

Debit Card: No interest is charged.

Credit Card: Yes, interest will be charged if you failed to pay the full sum owed to the bank within 30 days.

5. What kind of discount can you get?

Debit Card: Debit cards seldom have discounts or offers tag to them unless the discounts are tagged to the bank itself

Credit Card: Credit cards have all kinds of discounts depending on the type of cards and the bank it was issued from. Some credit cards also offer point systems where you can collect points to redeem for cash or rewards.


6. Do you need a bank account?

Debit Card: You need to have a bank account in order to apply for a debit card.

Credit Card: You do not need a bank account to apply for a credit card from the bank.

7. How long is the application process?

Debit Card: Within 2 weeks – a debit card is granted to you as long as you have a bank account with the specific bank.

Credit Card: 4 to 6 weeks – an application needs to be made to the bank. Income documents such as monthly salary or CPF contributions must be submitted together with the application.

8. How secure are your cards when you are making purchases?

Debit Card: A debit card is secured if you use a PIN together with your signature. However, most users do not use the PIN, making the card less secure than it should be.


Credit Card: A credit card is not secured if you are not careful with the way you used them for payment. For example, it is important to know that credit cards usage is extremely dangerous in some countries.

9. What is your fraud liability if you lose your card?

Debit Card: Relatively high. If your card is stolen and used by the thief, money is taken out of your bank immediately and damages like that is unlikely to be recovered in full in a short period of time. You may end up having to pay for the losses.

Credit Card: Low. If your credit card gets stolen, all purchases paid by the card will be blocked and reversed by the bank as soon as you report the lost card.

10. How will it affect my credit history?

Debit Card: Debit cards use your own money. It does not affect your credit history.

Credit Card: On-time payment of your credit card bills will improve your credit history. On the other hand, if you default on your payment for too long, it’ll affect your credit rating.

We hope that this simple guide will help you to better understand the differences between a debit and credit card.


Ultimately, do remember to use your money wisely and not to overspend!

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