Paying Online With a Credit or Debit Card: What Are the Main Differences?

Paying Online With a Credit or Debit Card: What Are the Main Differences?
Point Editorial

Credit cards and debit cards may have a similar look and feel, but they are two separate financial tools that function differently.

Each bears a 16-digit card number unique to each cardholder, whose primary purpose is to help the user handle money in a safer, more convenient manner as compared with using cash. Both credit and debit cards allow you to make purchases online or in-store. 

However, one key difference between credit and debit cards is that debit cards allow you to spend money by drawing directly from your own bank account. With a credit card, however, you borrow the money and eventually repay it to the credit card company. 

Read on to learn more about how credit and debit cards compare and the process of shopping online with each card type.

Credit and debit cards: key differences

Most people have at least one debit card and one credit card and have used both multiple times. While each is handy and easy to use, they influence your finances in different ways. 

Credit cards are issued by a bank and allow users to borrow up to a certain amount of money, known as a credit limit. Whatever you borrow during a specific billing period, you must pay back — typically with interest.  

Multiple types of credit cards exist, including a traditional card; a rewards card, which allows you to earn cash-back, air miles, or discounts (for example, with each purchase you make); or a secured card, which requires an up-front deposit before use. 

Major credit institutions also issue debit cards, but no borrowing is involved. Whatever money you spend comes directly from your checking or savings account. 

You can acquire a few different debit cards, the most popular being a standard debit card and prepaid cards, which you can prefill with a certain amount of money and then use to spend up to that amount. 

Credit and debit cards: advantages and disadvantages

Credit cards


One: Credit cards help build your credit history. Every time you use a credit card, it shows in your credit activity. Paying your bills on time, monitoring how much credit you use each month, diversifying your credit types, and demonstrating consistent and positive credit activity will help boost your rating. In the eyes of banks and other lenders, this communicates responsible behavior, and they will be more willing to enter into business with you in the future. 

Two: Credit cards have warranties and purchase protection. Depending on the purchase, sometimes you will have an extended warranty if an item is damaged or stolen. Such coverage can help you replace the item at a lower price, or you'll receive a refund instead.   

Three: Credit cards offer fraud protection. When you report any fraudulent activity or that someone has stolen your card, you are only liable for up to $50. However, it is essential to remember that if you fail to report this, your liability fees will increase to $500. These guidelines have been set in place by The Electronic Fund Transfer Act. 


One: Credit cards can lead to debt. Since you’re borrowing the bank’s money to make purchases, it can be easy, even tempting, to pile up the expenses, especially since the funds aren’t yours. But eventually, you must pay for everything you buy. 

Two: Credit cards impact your credit score. Just like responsible behavior can boost your score, irresponsible behavior can lower your score, too. Exceeding your credit limit and failing to make minimum monthly payments can make it challenging to apply for a new credit card, a mortgage, or a student loan. 

Three: Credit cards involve interest fees. Simply put, a credit card is a short-term loan. You must repay that loan on a revolving basis, plus interest. Some cards charge an annual percentage rate or APR as well. This is how much you have to pay to keep using the card. You may also have to pay foreign transaction fees, late payment fees, or withdrawal fees.

Debit cards


One: Debit cards can help you avoid debt. A debit card is an excellent way of managing your expenses, as you can only spend whatever you have in the bank. There is less temptation to make unnecessary purchases since funds are withdrawn immediately.  

Two: Debit cards also offer fraud protection. Particularly with debit cards issued by Visa and Mastercard, cardholders have access to fraud prevention measures. Again, as with credit cards, it is always better to report any suspicious activity as soon as possible to avoid heavy liability fees. 

Three: Debit cards have no annual fees. There are no APR fees with a debit card, nor is there a fee for withdrawing cash from in-network ATMs. 


One: Debit cards typically don't offer rewards. Reward programs are reserved for credit cards. There are some exceptions to this, however. 

Allow us to introduce you to Point Card

You work hard for your money, and Point works hard for you in return. Designed as a third alternative to traditional credit cards and debit cards, Point is a transparent, easy-to-use tool that promotes financial independence. Individuals can spend their own money how they wish while receiving exclusive benefits, including unlimited cash-back on all purchases. Point is proof that you do not need to have a credit card to enjoy the benefits they offer. In addition to bonus cash-back on subscriptions, food delivery, rideshare services, and coffee shops, Point users can have peace of mind thanks to multiple safety nets such as car rental and phone insurance, no interest fees, and fraud protection with zero liability.

Point Card is an excellent tool for intelligently navigating your financial journey and achieving and maintaining healthy monetary habits that will serve you well both now and in the future.  

Two: Debit cards won't help you build credit. One major drawback is that even though debit cards can help you adhere to a budget, they do not build up your credit history. This can prove to be a setback, especially if you're planning on taking out a loan or even renting an apartment down the road, as having no credit makes it harder for banks to trust you. 

Three: Debit cards can involve fees. While there are no annual fees, you have to pay extra costs like foreign transaction fees or when using an ATM that isn't associated with your bank.  

Paying online with a credit or debit card

Online purchases are much more convenient, especially if you don't have time to do in-person shopping, but you'll need a credit, debit, or prepaid gift card.

Online shopping may seem like a straightforward concept, but the process can be complex for first-time buyers. That said, we've broken down how to pay online into six simple steps. 

Step 1: Fill your virtual shopping cart with all your desired items. You can do this by clicking the "Add to cart" or "Add to bag" button. Click "Checkout" when you're finished. Always review your cart to make sure everything is in order first before paying. 

Step 2: Choose "Credit Card" or "Debit Card" as your payment method. Sometimes you'll be prompted to select the type of card, such as a Visa or a Mastercard. Fortunately, most retailers and businesses will accept most major cards, but Visa and Mastercard are the most common. 

Step 3: Enter your shipping address. This is an obvious yet crucial step. The company cannot deliver your items otherwise. 

Step 4: Enter your information as it appears on your card. This includes your name, your 16-digit card number, expiration date, and the CVV or security code on the back of the card. 

For debit card online transactions, you don't need to provide your PIN. Debit purchases are considered a "credit" transaction. The funds will be deducted from your checking account, typically two to four days later.

Step 5: Enter your card's billing address. It's important to note that this is not necessarily the same as your shipping address. Your billing address is where you receive your credit card or bank statements.  

Step 6: Verify your information. It is a smart idea to review everything one last time before you buy. Most websites will show you a screen that summarizes your purchases and personal information for you to double-check before completing your order. 

You may also have the option of paying through online platforms such as PayPal or Apple Pay. Make sure your credit or debit card is registered with either account before you buy. PayPal or Apple Pay will complete and confirm the transaction afterward. 

Online payment FAQs

Is paying online with my card safe? 

Yes, paying online is considered safe. Using a credit card is much safer than using a debit card, however. To reiterate, if you lose your card or someone steals it, you only pay $50 in liability fees. If the same thing happens to your debit card, you are fully responsible for all fraud if you do not report the problem within 60 days. 

Remember, unlike most debit cards, Point Card offers zero-liability fraud protection. That means you are not responsible for any fraudulent purchases made with your Point Card.

Always be aware of your security when shopping online. If the internet address or URL does not begin with “https” or there is no lock icon next to it, it is most likely an unsecured website, which means third parties may be able to access your personal information and card number.

Can I use a debit card online as if it were a credit card? 

Yes. There is no difference in how you will enter your debit card information compared to a credit card. The money is still drawn directly from your account. 

Can I use my credit card for online recurring payments?

Yes. The automatic payment feature can be approved with your card to pay bills, subscriptions, and other installments when they're due. You won't have to worry about missing deadlines or paying subsequent fees if you choose to activate this helpful feature. 

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Point Editorial
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