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Kaustubh Katdare
Kaustubh Katdare • Jun 12, 2008

Credit Card Vs Debit Card : Advantages & Disadvantages

I overheard the discussion between two young engineers about Credit Cards & Debit Cards.

Starting a thread where we can discuss credit cards vs debit cards. If you have any questions, post them in this thread!
You can also add Pre-paid cards as a third option! They act as normal Visa or Mastercards, but are limited to the amount you "top up" in it. Its distinct from debit cards in the sense that you don't really have a bank account tied to it. Plus, debit cards can only be used in limited places, I believe.

I'm saying this because I've got one 😉 Its easy to use.. you don't even need to be employed to get one, which is great for students.
Yes you can add third option as a Prepaid cards as I am also having it. It is worthy to use.
Where are my dear finance loving CEan's? There are many thread which requires their inputs.

I don't have much of finance knowledge, still trying to keep this thread alive so that someone can notice it and reply the question.

koli • Jul 11, 2008
Use more Credit card - you will be bankrupt sooner or later.
Use debit card - you will have better control on your finance.

But i know- you wont listen to me. I dont do it either. 😒
Those miles, and awards, and discounts and deals are just too attractive, aint they.

How many of you know that any MasterCard starts with 5 and Visa with 4.
Any one with Amex and discover ?
sjohnson2 • Nov 10, 2008
Well, that's quite a negative remark koli. And an untrue one at that. I've been using multiple cc's for years & my financial standing keeps improving. The trick is not to think they are a 'license to shop'.
And just to share .... I was doing some reading and came across these tips that may come in useful ............

Build (7) Lines of Credit for Prime Rate Score
I'm ask all the time on what builds a Good Credit Score. The answer is simple but the action can be a little challenging. To get scores in the Prime Rate which consist of a 680 or Higher but preferable a score of 720 is the Prime Rate which gives you lower interest Rates, qualify for lower down payments and the like.

In order to build a Prime Rate Score the following must be accomplished.
  • Must have 7 lines of Credit
    • Mortgage or 2nd Mortgage or HELOC
    • Automobile Loan or Motorcycle Loan
    • Minimum 4 Credit Cards with Revolving Credit
      • The Credit Cards must have at Least 50% of available Cash
      • Recommend to pay card off every Month
      • Recommend to use card for daily expenses but keep all cards low to pay off monthly
  • Must not be Late on Any Line of Credit
    • If Payment is 30 days late or More, this Line of credit is not Usable: Need to establish New Line of Credit
    • Must pay off all Debts with Vendor
    • Recommend to contact Vendor for Best Rates
    • Get No Credit Cards with Yearly Fees or Monthly Fees
  • Must have at Least 50 % available on the Line of Credit
    • Account must be below 50 % but recommend 25% or less:
    • It Takes 6 Months to Recover from over the Limit Fees:
    • Credit Cards will change the date of payment so pay account within 15 to 20 days...
It doesn't matter what the Rate is: for example: Rate is 39% which is excessive but does not matter because you pay off the entire balance in 15 to 20 days. However, if you are carrying a 25% or 50% balance, it does matter.
austenjonesufg • Dec 3, 2008

thank you sjohnson2 your post is good. and thanks to all for this subject.
well credit card is anytime better than debit card,but tat deosnt makes any diffrence as with both we can have equal advantages and security,but with debit you shud be aware of your account!!!
If you carry a lot of debt at high interest rates, you have options that you should consider to reduce interest payments. The path you take depends on your credit status, and the level of debt that you carry. In most cases, a credit card balance transfer from a high rate to a 0% rate credit card can be an ideal strategy.
Gud Luck..😁
Lock-Os • Jan 27, 2009
I tend to use debit over credit, mostly a habit of mine to not spend what I don't have. No sense of buying something now for more than if you were to just wait and pay for it in full first.
gohm • Jan 27, 2009
I prefer credit and not carry over a balance. That way I do not pay any interest, obtain mileage points and protected for fraud by visa. Little known fact that even a visa logo debit card you are only covered for fraud/claim if you use it as a credit card.
csmentor • Mar 16, 2012
To me..

Credit Card : Convenience for online purchase & BUYER protection
Debit Card: Withdraw cash for personal use

There was an instance when we paid in full for a electronic item, the item we got was different.. had we paid in cash/debit card we would have to accept the item.. we told the shop keeper (a BIG RETAIL CHAIN) that we would not accept the item and CANCEL the transaction with credit card company.. then the shop keeper BOUGHT the item for a different store and delivered us the item !!!

Credit Card i use for convenience and NOT FOR CREDIT, generally repay my outstanding in a week time. IT IS NOT GOOD TO SPEND THE MONEY WE DONOT HAVE.........

Hope this helps..
Kaustubh Katdare
Kaustubh Katdare • Mar 16, 2012
I'm forced into using a credit card for most of my online, international transactions. To me, both Credit Cards and Debit cards work the same way if you don't miss the payment cycles.
I haven't tried the Credit Card yet ,as debit card is covering my expenses within my limit 😀
vinci • Mar 20, 2012
I am doing transaction with debit card very well and prefer it .It teaches us to control on money or build more before going to spend 😎
also because it wont have monthly Big bills .
Anoop Kumar
Anoop Kumar • Mar 20, 2012
I use credit card for my purchasing but keep that much amout along side in my debit card.This way I get almost 45 days of interest in my debit card and pay the total credit card amount just few days before the due date.
I think using credit card is good but not more than your current amount in your debit card.
I'm forced into using a credit card for most of my online, international transactions. To me, both Credit Cards and Debit cards work the same way if you don't miss the payment cycles.
True, but the only advantage of credit card is , if you buy something after your billing date then you will get around 40 days ( new salary in my case 😛) to pay it!!
Kaustubh Katdare
Kaustubh Katdare • Oct 13, 2015
Thought of updating this discussion based upon my experience of using credit card for several years now. Well, there are definite advantages and disadvantages as well.


First of all, let me make it clear. Using a credit card is mandatory for me because it's the easiest form of making payments online, internationally. CrazyEngineers servers are hosted in the USA and I pay the hosting company through credit card. If you look at the convenience, nothing beats the credit card.

Of course, the credit period you get makes it easy to manage your expenses. But I must also note that you need a VERY STRICT discipline. I typically clear the dues 2-3 days before the due date and have missed the payment only once (because of some technical error).

You must follow the payment cycle and if you can't discipline yourself; credit cards can be pretty expensive to own. But if you are disciplined; you can definitely enjoy all the benefits.

Always negotiate the yearly fees with your bank. You will be surprised to see how quickly the banks will offer the credit card without yearly fees to you.

Then make sure that the reward points they offer are actually useful. I can't talk enough about the benefits of the reward points. I was able to get to and fro airfare totally free of cost for my entire family simply using the reward points! Plus, the reward points can easily manage one or two free movie tickets every few months.


If you don't clear your dues within time, the credit card companies can totally screw you. The extra charges, late payment fees and interest will make you wonder why you used the credit card in first place.

Credit cards make you an IMPULSIVE BUYER. Because you don't have to shell out cash; you tend to shop more. I've experienced this myself, slapped myself and got back into my senses.

So basically, if you are disciplined, there aren't any such disadvantages of credit card.
Credit cards as I mentioned in previous posts and my latest experience always pay on time. if you pay on time nothing beats credit card. But the flip side if you dont pay the interest rates are so much...

and the interest is not calculated from the due date but from the date you have actually made the transaction. So it will be so much.

so use carefully!
Anoop Kumar
Anoop Kumar • Oct 15, 2015
Most banks facilitate auto credit card payment (like ICICI and CITI, I have used). Link your credit card to your account and instruct to pay full outstanding on due date. Peace of mind, no need to remember the due date or outstanding amount.
Track your bank account for balance and spend accordingly with your credit card.
Extra benefit and security:
  • Your bank account is not exposed to any retailer. Also, most of international transaction only accept credit cards.
  • Some banks like ICICI provide free virtual credit card. More secure when you are transacting internationally or any not very reliable portal.
Kaustubh Katdare
Kaustubh Katdare • Oct 15, 2015
I think auto credit card payment is one of the best facilities available. HDFC offers you a choice to make the payment on the due date itself so that you get to enjoy the full credit period as well as get over the tension of making payments on time. The only downside is that you need to maintain sufficient balance in your savings account to make the payments.

However, I'd strongly recommend that you should keep check on all your expenses.

In the recent times, I've been getting a lot of offers on HDFC debit card; with promised cashback. I'm yet to do a comparative study on what's more profitable - cashback or the reward points. Has anyone worked on that?

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