What is a Credit Card?

What is the difference between a credit card and a debit card?

A Credit Card is a payment card issued to a person for purchasing goods and services and obtaining cash against a line of credit established by the issuer.  There are two main types of Credit Card: those issued by merchants and vendors, such as department stores or petrol / oil companies - and general purpose credit cards issued by banks usually under the VISA or MasterCard brand.  You can make purchases in value up to a pre-agreed credit limit then, subject to the issuer’s stated minimum monthly payment, repay the account in installments and pay interest on the reducing balance. 

Debit Cards

In comparison, and although they look similar, Debit Cards - like SWITCH, DELTA and CONNECT - can only be used to make purchases or withdraw money from a savings or bank / building society current account. So, when you use a debit card at Automatic Teller Machines (ATMs) or in stores to make purchases, the money is immediately withdrawn from your current / savings account (i.e. without allowing you any ‘credit’). You cannot, therefore, withdraw or spend more money than you have in your account or authorised overdraft limit.