Are debit cards also credit cards?

Are debit cards also credit cards?

Debit cards can be processed as credit cards by a merchant, but to the consumer, a debit card is not also a credit card. 

While debit cards look nearly identical to credit cards, both in the amount of card numbers, the signature space on the back, the chip and magnetic strip, and even the big-name logo in the corner, the way a debit card functions is entirely different than a credit card.

The distinction is important but confusing, so in this article, you’ll learn how and when to use a debit card and why it is sometimes treated as a credit card when it is not.

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Is a Debit Card Considered a Credit Card?

A debit card is not considered a credit card in the way that it functions for the user, according to Investopedia, an online financial resource. However, some merchants can process a debit card as a credit card for their transaction purchases.

Debit cards are essentially electronic cash, meaning the cash must be in your checking account for you to use it. No cash, no way to pay.

On the other hand, credit cards use a credit loan to apply toward purchases and then charge you for the credit later. You’ll have to pay back the purchase or risk being charged interest. But you won’t need any cash in your account to make a purchase.

Debit Card Features

When you use a debit card to make a purchase, the amount of that purchase is immediately deducted from your checking account, just like cash.

Banks rarely charge you a fee to use a debit card, and you’re not charged any interest on purchases because you’re paying for that purchase right then and there.

Debit cards allow consumers to avoid going into debt and monitor their spending habits more closely because they can only use what is available in their accounts. If the consumer attempts to spend more money than they have, the debit card transaction will be declined, or the consumer will be charged an overdraft fee by their bank.

Debit cards, however, have a few drawbacks. One is that you can’t typically earn cashback rewards or points like credit cards offer. Debit cards also don’t help you build credit and improve your credit score because you’re not demonstrating to any lenders that you’re responsible for repaying or managing a loan balance.

Credit Card Features

According to, Credit cards allow consumers to make purchases by using a line of credit or a loan. You’re spending money that you don’t necessarily have with a credit card.

Credit cards are convenient for bigger purchases because you can pay back the balance over time rather than needing to have one lump sum of cash.

Credit cards also incentivize consumers to spend credit instead of cash because they’ll earn rewards for every dollar they spend; from airline miles to cashback, many consumers prefer to earn something in return for their spending.

However, credit cards can get you into trouble if you don’t pay back the balance in full each month. Most charge interest on lingering balances, increasing the amount you owe over time. Credit cards also encourage some people to spend more money than they earn since they don’t need to have the cash to make their purchases.

Credit cards also charge annual fees just for having them.

Is an ATM Card the Same as a Debit Card?

While some people interchangeably use the terms ATM card and debit card, they are not the same thing.

Debit cards allow you to make purchases by way of the bank network they are associated with, such as Visa, MasterCard, and Discover. This logo will appear on your debit card, signaling you that you can make payments with your card wherever these companies are accepted.

ATM cards typically do not feature a logo other than the bank’s name where you keep your associated checking account. An ATM card is only used for accessing the functions on your account, including withdrawing cash from an ATM.

Is a Visa Debit Card the Same as a Credit Card?

When you see “Visa Debit” or “MasterCard Debit” as an option on the point-of-sale terminal where you’re making a purchase, selecting this option instructs the merchant to process the transaction as credit through the Visa credit network.

This means you will not be required to enter your PIN to complete the purchase, and the transaction will not hit your checking account for one to three days, similar to credit card processing times.

However, make no mistake that this is still a cash purchase. Visa is not offering you a loan. You are paying by using funds in your checking account.

If you’d rather process the transaction as a traditional debit by using a PIN, select “US Debit” on the point-of-sale terminal.

Can You Use a Debit Card as a Credit Card?

While you can process a debit card as a credit card with a merchant, the transaction is still coming out of your checking account. You are not “charging” a credit line.

Some merchants allow consumers to process debit cards as credit cards to bypass inputting a PIN. You’ll often see this at gas stations, restaurants, and online purchases.

To use a debit card as a credit card, you still must have the funds available to spend in your checking account. If not, the purchase will be declined, or your bank will charge you often hefty overdraft fees for every transaction that takes you over your balance limit.

Final Thoughts

Debit cards are not also credit cards in the way that they work for the consumer. While you can process debit cards like a credit transaction, the end result is that cash comes out of the available balance in your checking account.

Debit cards offer some similar protections to credit cards, they are easy to use and manage, don’t charge annual fees, and won’t get you into debt. But debit cards also don’t offer rewards or the chance to build your credit history as credit cards do.

For most people, having a credit card and debit card offers a good balance of the benefits of each, allowing you to choose when, where, and how you spend your money.


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John is the founder of TightFist Finance and an expert in the field of personal finance. John has studied personal finance for over 10 years and has used his knowledge to pay down debt, grow his investment portfolio, and launch a financial based business. He is committed to sharing content related to personal finance based on his experience in his career, investing, and path towards reaching financial independence.