What are the differences between credit and debit card?

Wondering what bank card you have? Knowing what bank card you have is important so you know how to spend on it. Telling the difference between a debit or credit, or different types of credit cards, is vital to using your card correctly and avoid paying over the odds.

We look into the different types of credit cards and debit cards to explain the differences and how you should use each of them.

What bank card do I have?

Whether your card is debit or credit, there are a few things you will immediately be able to tell just by looking at your card besides the card provider. The most important is which electronic payment provider your card operates with. The one more way is you can use BIN number to check the Bank card use the BIN Search tool and know which card do you have.

The biggest payment processors are Visa and Mastercard, and there is a good chance you will see the logo of one or the other printed on your card.

Payment processing companies like Visa and Mastercard operate the system that allows you to make a payment, linking your point of purchase with your bank or card provider.

Because these networks each cover different providers and locations you may be limited in which cash machines you can use, depending on which provider you have.

Historically Visa had the greater coverage, but these days you are unlikely to find a cash machine in the UK that accepts one but not the other. The coverage of American Express cards can be more limited.

However, that all changes when you go overseas, where you may only find cash machines operating with one or the other.

If you are going to remote parts of the world it may be a good idea to travel with both Visa and MasterCard cards to ensure you can access your money.

Both Mastercard and Visa provide credit and debit cards, but they are often branded slightly differently. Mastercard’s main debit arm is known as ‘Maestro’, although MasterCard may also print the word ‘Debit’ near the MasterCard logo.

Likewise Visa operates both a Visa debit system, where the word ‘Debit’ is printed above or below the Visa logo, and Visa Electron. Visa Electron cards do not allow the card user to go into an overdraft.

To tell what kind of bank card you have you can look for the logo on the bottom right-hand corner of the front of your card, or call your bank or card provider.

All bank cards will have a 16-digit card number printed across the front of the card, as well as a ‘valid till’ or ‘expires end’ expiry date.

Debit cards, linked to your bank account, may also have your 8-digit account number printed on the front of the card, as well as a 6-digit sort-code, identifying your bank branch.

Credit or Debit?

Knowing whether you have a credit or debit card is crucial to knowing how to spend on that card. If you don’t see the words ‘debit’, ‘maestro’, or ‘visa electron’ printed on your card then it is probably a credit card.

Debit cards can also display an 8-digit account number and 6-digit sort code, whilst your credit card will only show one long 16-digit card number on the front of the card.

As the names suggest, credit cards are designed for borrowing money from your card provider, whilst debit cards are there for you to access your own money.

Crucially you should only ever use your debit card to withdraw money from a cash machine, as credit card providers charge for this.

A credit card, meanwhile, is deal for in-store purchases, or online, but remember to clear your balance at the end of every month to avoid interest charges.

Credit cards are also far more suitable for large purchases where any dispute or lack of satisfaction with the delivered product is possible thanks to ‘Section 75’ protection.

Section 75 protection essentially provides equal liability for purchases made on Visa, MasterCard, or American Express credit cards of between £100 and £30,000.

That means, for instance, if you order a product worth between £100 and £30,000 online and it never arrives, you should be able to claim the money back through your bank by citing Section 75.

Which credit card?

There’s more to finding out which credit card you have though. To make things even more complicated, UK credit cards come in a wide range of different types making them suitable for different styles of spending.

There are seven main types of credit card that you should distinguish from each other.

The most common credit card is a standard low-APR card designed for everyday spending.

The APR refers to the interest rate charged on the card, the lower the APR the lower the cost to you, but you can avoid paying any interest at all by clearing your balance within the interest-free period (typically 56 day intervals).

To find out the APR on your card you can either contact your card provider, check online, or look at a recent statement.

However, there are also UK credit cards which have interest-free periods, whereby you pay no interest at all on the money you are borrowing for a longer period of time.

Be careful to clear your balance before this period comes to an end though or you could wind up paying a lot.

If your card has a particularly high APR don’t worry, it may be an introductory or credit-builder card.

These cards are typically issued to people with limited, or no, credit history, but if you stick to the rules and clear your balance each month, you won’t be affected by interest payments – and could improve your credit history in the process.

Other popular types of credit card include reward cards – credit cards linked to particular providers like Sainsbury’s Nectar and Tesco Clubcard giving you points with purchases – and cashback cards which give you money back for particular purchases.

The only way to know all the details of your card are to look at the paperwork you were given when your credit card was issued.