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Compare Credit Cards with Debit Cards – The Pros and Cons

Oliver June 2020 5 min

Table of contents

This short article will compare credit cards to debit cards. We point out the pros and cons of both types of cards, the potential risks, and try to help you decide which is best for you.

The Penta Business Account offers corporate debit cards for all your employees. Open a Penta account today to start benefitting from features, such as automated accounting

Credit Cards

Credit cards are a tough concept for some. The potential to spend money you don’t have can be scary. It’s something that has landed many people in serious debt. But with the right mindset and control of your finances, credit cards are beneficial.

For example, in most cases, if you want to rent a car, you will need to leave a credit card deposit. Without a credit card, the rental company may insist you take their expensive insurance.

There are a large number of credit cards on the market. What is the best credit card for you will depend on how you use it. It is possible to have an interest free credit card if you pay off the debt every month on time. But this does take strong discipline.

Credit Card Pros

Ease of use

Using cards to make a purchase is simplicity itself. Choose what you want, take it to the payment point, swipe your card, enter the pin, and that’s it. So long as you have credit available, you will complete your transaction in seconds.

Accepted Worldwide

The majority of credit cards are managed by either Visa or Mastercard. These two companies have partnerships worldwide, which means you should rarely if ever, have a problem using your card. 

Credit History

Owning and using a credit card is excellent for building up your credit history. It’s a simple fact that with no kind of credit history, trying to get a mortgage or loan can be difficult.

Extra Protection

Making a purchase using your credit card can sometimes give you extra protection. With some credit cards, the card issuer is equally liable as the retailer for your purchases. This means that should you have a problem with an item, you may be able to claim from the card issuer. 


Customer rewards have become big business. Some cards offer points that you can redeem against items in a catalog. With others, you can exchange the points for cash. 

Short-term credit 

If you are careful, a credit card can be used for very short-term credit. On purchases, interest is not usually charged until the month after your bill is issued. This means that you can get up to 56 days’ of free credit. If you don’t pay off the debt at the end of the month, interest will start to accrue.

Credit Card Cons

Easy to overspend

Both credit and debit cards are straightforward to use. But with a credit card, you need to be more careful. The card issuer will set a limit for your spending. Sometimes these are very generous, and it can be tempting to spend more than you intended. The best advice is to try to clear the card every month.

Interest and charges

Credit card interest can be very high, averaging around 18% per annum. But many charge much higher rates. The other thing to look out for is the charges. Miss a monthly payment, and there will be a hefty charge. Go over your limit, expect a charge. Plus, there are often annual charges for having the card.

Withdrawing cash

Withdrawing cash on a credit card is not a good idea. You will usually pay interest from the day you withdraw the money, and there may be other fees. It is an expensive way to get cash.

Debit Cards

Debit cards, compared to credit cards, only allow you to spend the money available in your account. This will include any overdraft facility you have arranged. The interest charged on overdrafts is usually lower than credit card interest.

Debit Card Pros

Ease of use

As with Credit cards, debit cards are mostly missed by either Visa or Mastercard. In most cases, they will be accepted all over the world. 

No interest unless you go overdrawn

Because you are spending the money you have in your account, there is no interest, unless you go overdrawn. But even then, some banks will allow you a small overdraft with no fees.

Low charges

You may have to pay an annual card fee for your debit card, although some come free with your account. 

Controlling your finances

As the money is debited from the account the moment you spend it, you cannot spend more than you have. With your Penta Business Account, every employee can have a debit card. Card limits can be set individually, and you get real-time notifications when it’s used. It’s an excellent way for your employees to manage their expenses. With a Penta Corporate debit card, your employees can upload receipts as they spend. You can also tie this in with our automated accounting, saving you hours of work.

Debit Card Cons

Not much. You can only spend what is available in your account or up to your overdraft limit. The only downside is that if you’re not good at managing your budget, it is easy to spend using a debit card and end up with no money until you are paid again.


We hope you found our short credit card to debit card comparison is useful. Both types of cards have their uses. The credit card may not suit your lifestyle, but it offers features the debit card cannot. 

If you are averse to using credit, then stick with just a debit card. If you efficiently manage your finances, then consider a credit card for the extra benefits. The majority of people will find having both types of card is the most convenient.

Enjoy all the benefits of online banking with great features. Open a Penta Business Account today.

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