Everyday money · General financial education

Debit card and credit card

A debit card charges the balance or an overdraft. A credit card advances the amount, which you repay to the issuer.

In more detail

With a debit card the account is the source, and the booking often follows the card system promptly. With a credit card the issuer advances the amount until the statement arrives. Interest arises when the contract provides it for the open balance, not merely because the word credit is in the name. The Deutsche Bundesbank describes card payments. Finmon recommends no card.

Background

The same piece of plastic can settle differently depending on the product. The print alone does not say whether a balance bears interest or whether there is time to pay. That is in the contract. A card is also not protection against fraud: the rules for disputing a payment and for liability follow the contract and payment law. Finmon does not read card terms.

An example

You pay in a shop. With the debit card the amount is then missing from the account, as far as the balance or overdraft reaches. With the credit card it appears on the issuer's later statement. Two paths, the same purchase.

A common misconception

Credit card means the purchase is already paid and never costs extra.

The issuer advances the money. Whether and when interest arises is in the contract, not in the name.

Source: Deutsche Bundesbank · Kartenzahlungen. Last reviewed: 2026-11-09. Editorially reviewed on 2026-11-09. Next review 2027-11-09. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.