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Credit Card vs. Debit Card: What's the Difference?

Both credit cards and debit cards can be used to make purchases, but where the money comes from differs based on the type of card you use. Debit cards are linked to your bank account, so every time you make a purchase, the amount is immediately deducted from your account balance. Credit cards are connected to a line of credit, so you’re borrowing money that you’ll have to pay back later. The money doesn’t come out of your bank account until you pay your credit card bill.

How do you get a debit card?

In order to get a debit card, you will first need a checking account at a financial institution. At Santander Bank, new checking account customers can request a debit card as part of the application process. All customers can activate their debit card as soon as it arrives and start making debit card transactions. If you already have an account and have lost or damaged your debit card, you can easily report it and request a replacement through the mobile banking app.

Read more about the benefits of the debit cards you can get through Santander, or additional details on how to get a Santander debit card.

How does a debit card work?

Debit cards are like an electronic form of cash, without having to carry paper money. You will deposit money into your checking account, and then you will be able to use your debit card to spend that money on purchases. Generally, you will not be able to spend more than the available balance in your checking account. Your debit card will have a 16-digit number that you can use for online purchases, as well.

Some benefits of using a debit card include:

  • Avoiding additional debts
  • Easy access to your cash without relying on paper money
  • Immediate payment, avoiding bills to pay later

Some potential downsides of using a debit card include:

  • No relationship to improving your credit score
  • Generally, limited by the available balance in your checking account
  • Possible overdraft fees

How does a credit card work?

Like debit cards, credit cards can be used to make purchases. However, when you make a purchase with a credit card, you are borrowing money from a line of credit you have to pay back later. If you don’t pay off your entire credit card balance by the monthly due date, you’ll be responsible for interest charges. Different credit cards may have different interest rates, but it will always be a percentage of your balance owed.

Paying down more than the minimum amount each month is always a good idea as it can help you save on interest and potentially improve your credit score.

Because credit cards are not connected to your bank account balance, you can make a purchase that costs more than the money you have at the time. However, you should be cautious about spending more than you have. If you need to make a large purchase, like a new laptop or appliance, make sure you have a plan to make regular payments.

Some benefits of using a credit card may include:

  • Cash back offers and rewards points for regular purchases
  • Purchase and consumer protections and the ability to pay off large purchases in smaller installments
  • Building credit history
  • Fraud protection
  • Special benefits for students, travelers, businesses, or other interest groups

Some risks of using a credit card include:

  • High interest rates on balances carried month to month
  • Possible fees, including annual fees or for certain types of transactions
  • Potential harm to your credit score for late payments

How do you get a credit card?

Unlike a debit card, you don’t need a checking account to open a credit card. You can apply for a credit card through a financial institution (like a bank or credit union). They’ll look at your financial information, including your credit score, and approve or reject your application.

If you’re approved for a credit card you’ll be given a credit limit, which is the maximum amount of money you can borrow before you have to pay down your debt. Once you’ve made a credit card payment, you’ll be able to make purchases on your credit card again.

Many credit card companies offer perks like:

  • Rewards points and programs
  • Cash back on purchases
  • Additional insurances or warranties
  • Travel credits and other benefits

You can sometimes monitor your credit score for free, so you can keep an eye on changes to your score when building credit. Learn more about how to get a credit card.

Credit or debit: Which type of card is best for you?

Every person is different. Your spending habits are very important when considering whether to use a credit or debit card, or what type of card to use for each purchase.

If you think you could overspend with a credit card and accrue high interest, then a debit card would be the safer choice for you. Both types of cards offer protection from fraudulent transactions, so if your information is stolen and purchases are made on your account by someone other than yourself, you won’t lose that money—no matter how large or small the transaction.

If you're used to following a budget and are comfortable paying your balance on time, it might be better to earn rewards and build credit by using a credit card. You can also use a debit card for small everyday purchases, while keeping a credit card in your wallet for larger purchases and emergencies.

Ultimately, the type of card you choose to use in any given situation should be based on your comfort level, the cash you have available, and how you prefer to manage your finances. It’s important to always understand how your card works, what fees you may be responsible for, and when you’re required to make payments.

Card security

Both debit cards and credit cards come with security features to help keep your accounts safe, including microchip technology, account monitoring, and limited liability for fraudulent transactions (Santander cards include a zero liability policy for fraudulent transactions, subject to the customer’s card or account terms and conditions). However, you’ll need to report a lost or stolen card immediately. This will help protect you from being held responsible for purchases or charges. Because debit cards are connected to a bank account, it’s possible that fraudsters could drain the balance and then incur overdraft fees for the account holder. With Santander Instant Card Hold1, you can instantly put your lost credit card or debit card on hold. Make sure you understand the protections in place on your credit or debit card when it’s issued, so you know how to keep your account as safe as possible.

Getting started

You can explore Santander debit and credit card options and easily apply online. Or you may prefer to speak to someone at your local branch. All methods are designed to be easy and secure.

Learn more about Santander Checking and Credit Card options.