Roqqett Blog

October 16, 2021
Author: Joelle Phua

Money Insights: Credit Cards vs Debit Cards

A breakdown of the similarities and difference between debit and credit cards.

Quick Summary

  • Breakdown of the similarities and difference between debit and credit cards.
  • Benefits and drawbacks of both.
  • How to use Roqqett to make the most of your cards.

Cards galore! There are so many cards available, but more importantly, what's the difference between them? We get it, it can be confusing and overwhelming. Cards were used for over half of payments in 2020 (UK Finance), so it's time to get clued up on them if you aren't already.

In this blog post we'll focus on the differences and similarities between credit cards and debit cards, as well as what they're best for.

First, let's get a whirlwind breakdown of each.

Debit Card breakdown

How does it work?

By definition, a debit card is a card that allows you to purchase things where the money will be taken directly from your bank account. It's almost like paying with cash but electronically.

You can enter a PIN number to verify your payment. For purchases under £100, you can use the contactless function and just tap your card on the card reader in the shop where you see the "contactless" logo.

You can also use debit cards to withdraw money from cash machines or from a bank.


You can use debit cards to make purchases in person and, crucially, online. This means that cash is not needed. This is really convenient when you don't have the space or don't want to carry loads of cash and loose change.

Another benefit with card payments in general is that it's safer and more hygienic for everyone instead of handing cash, which is especially important since Covid-19.

You can only spend what's in your debit card, which is good for those of you who worry about overspending and going into debt with credit cards.

Mobile banking is becoming increasingly popular and using debit cards means that you can see your balance anywhere you go. This reduces the chances of spending more than you planned to. You can also take advantage of apps like Roqqett that help you manage your finances.


Even though debit cards are easier to access, not everyone has access to them. This can be for various reasons including credit score.

Although you can't borrow money on a debit card, you can get an arranged overdraft with your bank. An arranged overdraft means that you'll be able to spend an agreed amount more than you have. Sometimes you may not need to pay interest on what you owe. Make sure you check overdraft fees with your bank as it can be up to 40%.

Another potential downside of debit cards is that you get less fraud protections and perks than you'd get with credit cards. If someone uses your debit card details fraudulently, the money is taken directly from your account so it may take longer for you to notice and for your bank to reimburse you.

Photo by CardMapr on Unsplash

Credit Card breakdown

How does it work?

Credit cards are like debit cards in that they allow you to make purchases. However rather than the money coming from your bank account, the money comes from your credit card company. At the end of the month, your credit card bill or statement shows you how much you've spent and you can pay it off.

Depending on whether you pay in full or pay back over several months, you'll be charged interest. In that way, you're technically in debt until you pay off the money you've spent on your credit card.

You'll need to apply for a credit card before being able to use one. Various sites offer eligibility checkers before actually applying to see which is the best deal for you. Credit cards also come with a limit so be sure to check this when choosing and you can request to decrease or (in some cases) increase it.

You also need to be 18 or over to apply.


For starters, credit cards offer better consumer protection than debit cards since the money is coming from the companies themselves. Furthermore, receiving your credit card statement or bill forces you to check your purchases, so if you see a fraudulent purchase, you can report it before paying your bill. Section 75 of the Consumer Credit Act ensures that any purchases you make over £100 and up to £30,000 are protected and be refunded to you if anything goes wrong.

You can spread the cost of purchases on credit cards. When you receive your credit card statement, you have the option to pay in full or just pay the minimum amount. Though it's cheapest and best to pay it in full if you're able, you can pay the minimum and pay for your purchases over several months.

Of course, we all love rewards and perks and credit cards offer various rewards such as air miles, cashback, bonuses and more! These work the best if you plan to spend on it like a debit card to build up the points. Shop around and see which are the best for you.

Credit cards also help to improve your credit score. Keeping up on your credit card repayments proves that you're a lower risk and therefore this helps to lower the cost of borrowing on other purchases, such as mortgages.


On the flip side, credit cards can worsen your credit score. If you're not careful with repayments or already struggle with overspending, you could rack up a bad credit score quite quickly. See more about your credit score from this MoneySavingExpert guide.

It's difficult to apply with a bad credit score. Credit card companies will do a check on your credit file before approving your credit card application. However, if you have a less than ideal score, they can reject your application which also shows up on your credit history.

Watch out for high interest rates if you're not paying in full at the end of the credit period and spreading the repayments. You may be on an introductory 0% interest if you're a new customer but make sure to check how long that lasts.

Similarly, be careful of getting into the debt spiral which is when your debt just keeps carrying over into the next month and interest starts to pile up.

Also, some cards, like American Express, aren't accepted everywhere just yet. You might want to take this into consideration when choosing your first credit card.



  • Allows you to make purchases.
  • You could overspend if you're not careful.
  • Your credit score may be impacted - going over your overdraft (debit card) and not making repayments on time (credit card).


  • Debit is spending your own money, credit is spending your credit card company's money.
  • You get less fraud and payment protection on debit cards than credit cards.
  • Credit cards allow you to pay for purchases over time.

The bottom line is, whether you choose to use a debit card or credit card, or both, you need to manage your finances wisely as it could get out of hand.

Make the most of your cards with Roqqett

Use Roqqett to keep track of your spending, with smart insights and an overview of all your accounts and cards, whether debit or credit.

  • Avoid overdrafts with balance notifications.
  • Make smart spending decisions.
  • Budget easily with category breakdowns.


Explore the Roqqett Range


Roqqett Mercury

Boost revenue and get instant settlements before shipping any orders with Roqqett Pay.


Roqqett Gemini

Boost loyalty and sales with a complete express checkout journey for your customers.

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