What’s the difference between a credit card and a debit card?

The main difference is that when using your debit card you’re spending money you already have, while with a credit card, you’re borrowing money and promising to pay it back later, potentially with interest.  

Here are three other major differences:

Spending Limit: 

Credit Card: The bank decides how much you can borrow based on your credit score and income. You can’t spend more than this limit.

Debit Card: You can spend however much you put in. If you spend more than what’s in your account would go into what’s called overdraft. In this case, the bank would give you a small loan (with fees) til you pay them back.

Impact on Credit Score:

Credit Card: Responsible use, like timely payments, can boost your credit score. But things like not paying your card or maxing out your limit could hurt your score.

Debit Card: Doesn’t affect your score since you’re using your own money and not borrowing from anyone.

Safety and Fraud Protection:

Credit Card: Offers strong fraud protection. If there is fraud on your card, you’re not immediately out that money while the issue is resolved since you’re dealing with the bank’s money, not yours.

Debit Card: While they also have fraud protection, if someone steals your info and uses it to make purchases you no longer have access to that money. That could leave you short on funds until the issue is resolved.