Credit vs Debit: Which card is better for you?


For most, having credit and debit cards can be stereotyped as status symbol. Indeed, at one glance they look similar but not really quite. They both have 16-digit card numbers, expiration dates, magnetic strips, and EMV chips. But in what other ways are they different from each other? With credit card, you can borrow money from the card issuer up to a predetermined limit in order to make purchases or cash withdrawals while with a debit card, you can spend the money that you have deposited at the bank.

In la yman’s terms, in credit card, the government is basically giving you a loan or credit line that you may use in which you need to pay for whole at the end of the month to avoid charges. Technically, debit card functions the same with credit card where you either swipe it, tap, or pin your code. You might have at least one credit card and debit card in your wallet but for those who are yet to open etheir of the two, we have compiled some key notes in order for you to decide which one is better for you.

Read: Different ways to Pay Credit Card in the Philippines

Advantages of debit card

1. No accumulation of loans because you cannot spend more than the amount inside your account.
2. It has no annual fees and charges.
3. No need to bring physical cash (cashless).

Disadvantages of debit card

1. You cannot use it for emergency expenses that are beyond the amount in your account.
2. It has additional charges such as maintenance fees and overdraft fees.
3. It has less security which is more prone to scammers.

Advantages of credit card

1. It has no interest if you will pay on time.
2. It has rewards or points that you can earn, exchange for travel and other stuffs.
3. It has special discounts or free items because of their partner restaurants, airlines, hotels and etc.
4. The credit limit is high especially in times of emergency.
5. Just like in debit card you don’t need to bring physical cash with you.

Read: No Annual Fee Credit Cards in the Philippines

Disadvantages of credit card

1. Sometimes you will have a feeling of “sky is limit” in spending.
2. Probability of accumulation of debt due to irresponsible usage of the card.
3. When the interest is balooning if you cannot pay your total balance.
4. There’s an annual fee you will have to pay.

So which one is better for you?

Despite having a similar appearance, credit and debit cards have different advantages and disadvantages. If establishing credit and redeeming rewards are important to you then credit card is a crucial tool for your financial journey. If you wish to keep a closer handle on your finances, a debit card is a better option for you. Well, both are actually great for convenience, however, it really depends upon the cardholder’s discipline and at the end of the day, the choice is yours. Above all, don’t be an impulsive buyer.

Read Also: When and Why Should You Get a Credit Card?

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