Debit cards and credit cards are two completely different products. They work differently from each other in terms of eligibility requirements and benefits. Each has its own set of pros and cons. Whether you should get a debit or credit card depends on your current requirements as well as your long-term financial goals.

Debit Cards vs. Credit Cards: Eligibility Criteria

Qualifying for a debit card is pretty straightforward. All you need is a bank account. Whichever bank you have a checking account with will issue you a debit card. It’s that simple.

Qualifying for a credit card is a little more complicated. You have to apply to a bank or credit card company. The credit card issuer will first assess your creditworthiness to determine whether or not to approve your application. Creditworthiness is based on your credit history, income, and credit utilization. If your financials are strong, you’ll be approved.

The eligibility criteria can act as a limiting factor. Whether you should get a debit or credit card will depend on which one you qualify for. If you meet the requirements for both, it helps to dive deeper into the differences between the two. This will help you make a more informed decision about which one you should get.

How A Debit Card Works

When you swipe your debit card to pay for a purchase, it withdraws money directly from your bank account. For it to work, you must have a sufficient balance in your account to cover the purchase amount. If you try to spend more than the money in your account, the transaction will get declined.

You can also use your debit card to withdraw cash at any ATM. Here again, you can only withdraw the money that you actually have in your account. That’s your debit withdrawal limit.

Debit Card Pros & Cons


  • Because you can only spend what you have when you use a debit card, it removes the risk of getting into debt.
  • You can swipe the card at any ATM and withdraw the cash you need without incurring any fees.
  • Carrying a card is so much safer than carrying a wad of cash with you everywhere. If your card gets stolen you can call the bank and freeze the card immediately. If cash gets robbed, chances of getting it back are slim.
  • Getting a debit card is easy. There’s no minimum credit score or other complicated requirements. All you need is a checking account to get a debit card.
  • You don’t need to worry about annual fees, payment due dates, or late payment fees.


  • Using a debit card won’t help you establish a credit history or build your credit score. This is the biggest disadvantage of debit cards.
  • You won’t earn any cashback, reward points, or discounts on purchases made using your debit card.
  • Although there are no annual fees, some banks may charge maintenance and other fees.
  • If your debit card gets stolen and used before you can report it, you won’t be able to get that money back.
  • Some hotels and outlets don’t accept debit cards. This can be a problem when you’re traveling.

How A Credit Card Works

With a credit card, you don’t need to have money in your bank account to pay for purchases. The credit card acts as an installment loan. It allows you to borrow money for your purchases. You can keep borrowing for ongoing purchases up to a certain credit limit set by the card issuer. Once you reach the limit, you cannot borrow any more till the next billing cycle.

At the end of the billing cycle, you’ll get a bill from your credit card issuer. The bill will include details of your transactions and any other charges or balances from the previous month. It also includes details of the due date as well as the option to make a minimum payment. As much as possible, you should try and pay the full amount by the payment due date.

If your payment is late, the issuer will charge you a late fee plus interest on the outstanding amount. Credit card interests are notoriously high. If you’re already struggling to make payments, the interest can send you even further into debt.

Credit Card Pros & Cons


  • Using your credit card responsibly is the single best way to build your credit score. Responsible usage involves buying only what you can afford and paying the bill in full before the payment due date. Consistent on-time payments add points to your credit score every month.
  • You can buy big-ticket items even if you don’t have the funds in your account.
  • You earn attractive rewards every time you use your credit card. Rewards vary depending on the type of card you carry. Common credit card rewards include cash back, points, and miles that can be redeemed for flights or hotel stays.
  • Carrying a credit card is safer than carrying cash.
  • If your credit card gets stolen and used before you can report the theft and freeze the card, the bank bears the loss.
  • You can travel anywhere without worrying about running short of funds. All hotels, gas stations and stores accept credit cards.


  • It can tempt you to spend more than you have. If you can’t afford to pay the bill in full by the due date, you’ll be charged a late fee. You’ll also be charged high interest on the unpaid amount.
  • Late payments can also damage your credit score. Even one late payment will reduce your score by a few points.

Is A Debit Or Credit Card Right For You?

Credit cards offer several significant benefits, from attractive rewards to the opportunity to build credit. If you qualify and can trust yourself to use a credit card responsibly, this should be your preferred option.

A debit card is a good alternative only if you don’t qualify for a credit card or if you’re irresponsible with finances.