If you have a credit card then it is possible to use your credit card as a debit card. Usually, a debit card is linked with a bank account but that is not the case for a credit card. Therefore, you might not be able to make debt payments with a credit card but you can use the card to sign up for recurring payments!
What is a Debit Card?
A debit card is a type of payment card that is directly linked with a bank account. When a user uses a debit card to make a payment, the payment amount is deducted directly from the linked bank account. You can use a debit card instead of cash to make purchases. A debit card is also known as a “check card” or “bank card.” You can use a debit card to make payments, purchase products, or withdraw money from an ATM.
What is a Credit Card?
A credit card is quite similar to a debit card; it’s a small plastic card and it is issued by banks and other financial service providers. A credit card allows the user to buy products or services on credit. The credit card issuing company imposes the condition that the credit card holder has to pay back the borrowed money including the applicable interest. There might be other additional charges that the credit card holder has to pay like late payment fees etc.
Difference between Credit Card and Debit Card
|Credit Card||Debit Card|
|You will be able to borrow money to purchase various products and pay the due amount later||When you use a debit card, money is automatically deducted from your bank account|
|Help you build your credit history||A debit card won’t help you build your credit history and it won’t help you increase your credit score|
|You will be charged extra money if you won’t be able to pay the full due amount||There is no interest charge for debit card|
|You can use the credit card to make a large purchase without any cash on hand||You must have a balance on your bank account before you can use the credit card|
|Various fees are associated with credit cards like late payment fees, balance transfers, cash advances, foreign transaction fees, etc.||A debit card has various fees like overdraft, out-of-network ATM fees, etc.|
|For credit cards, liability for fraudulent purchases is limited||No liability for fraudulent purchases|
Difference between Credit Card and Debit Card Transaction
|Credit Card Transaction||Debit Card Transaction|
|A signature is used for verification||A PIN number is required to complete the transaction|
|Various discounts available||You can get cashback|
|The transaction is processed through credit card networks||The transaction is processed electronically|
|Merchant processing fees are higher||Merchant processing fees are lower|
|It takes several business days to settle the transaction||The transaction is processed immediately|
|There are customer fees on credit cards||Usually no customer fees|
How to Use a Credit Card as a Debit Card?
You should keep in mind that you won’t be able to use a regular credit card like a debit card. However, there are prepaid credit cards available that you can use as a debit cards. A prepaid credit card won’t help you build your credit score but with it, you will have control over your finance. So, if you want to use your credit card like a debit card then the below information will help you.
Step – 1: Choose a Prepaid Card
First, you have to find a prepaid credit card that offers you the best deal. Unlike regular credit cards, prepaid credit cards come with some fees. Therefore, you should find a prepaid credit card that charges a small setup fee. Some prepaid cards come with reloading fees while others don’t charge any reload fees. Therefore, pick a prepaid card that has a low reload fee or no reload fee. Apart from that, you should also check other fees like –
- ATM withdrawal fees
- Monthly maintenance fees, etc.
After considering the above factors you should finalize a card and then buy the card by paying any purchase fees.
Step – 2: Use the Card
Before using your card, you have to load the card with money and then you will use your prepaid credit card like a debit card. With this type of card, you will be able to make payments anywhere that accepts credit cards. Moreover, you will be able to pay your bills online using your prepaid credit card. You will need some information like your name, expatriation date, and security code to pay the bills. If your card’s balance becomes low then you have to reload your card or you won’t be able to use your card. There are many ways you can reload a prepaid credit card. You can load the card through a bank account or PayPal, with cash, or by depositing your paycheck onto it.
Withdrawing Cash with a Regular Credit Card
With a debit card, you can withdraw money from ATM but that is not possible with a credit card. However, some credit cards have a cash credit limit feature that allows the credit card holder to withdraw a certain amount of money from the ATM, just like a regular debit card. If your credit card has this feature then you will be able to withdraw money from the ATM. You should keep in mind that if you want to withdraw money using your credit card then you will need the PIN. Usually, credit cards don’t have a PIN, so you have to call customer care or check online to find out the Pin of your credit card. Once you have the PIN of your credit card, you will be able to withdraw money by following the same process as withdrawing money with a debit card. However, there will be a limit on how much money you can withdraw with your credit card.
Is it Possible to Make Debit payments on a Credit Card?
It is not possible to make debt payments on a credit card. This is because a credit card is not linked with an existing source of money like a bank account. Therefore, you won’t be able to use your credit card to make debit payments. However, you will be able to use your credit card to sign up for recurring payments. For example, you can use your credit card details to sign up for a subscription entertainment service like Amazon prime, monthly gym membership, or pay any utility bill. When you subscribe to any service, your credit card will be charged regularly which is quite similar to direct debits.
FAQs about Can Credit Card be Used as Debit Card
Can a Visa credit card be used as a debit card?
No, it is not possible to use a Visa credit card as a debit card. But, if the Visa credit card is a prepaid card then you will be able to use the card like a debit card.
Is a credit card the same as a debit card?
A credit card is not the same as a debit card. With a credit card, you will be able to purchase products without money. But when you use your debit card to make a purchase, the money will be deducted directly from the bank account that is linked with the debit card.
What are the types of credit cards?
Some common types of credit cards are –
- Standard unsecured credit cards
- Secured credit cards
- Credit cards for students
- Small business credit cards
- Store credit cards
- Charge cards, etc.
How do I convert credit to debit?
There are two ways you will be able to convert credit to debit. One way is to visit the teller at your bank and ask the taller to withdraw funds from your credit card and then deposit the money to your bank account. Another way is to withdraw money from the ATM using your credit card. You have to put your credit card into the machine and withdraw the money.
Can I transfer money from a credit card to a bank account?
Yes, it is possible to transfer money from a credit card to a bank account. You can transfer the money from your credit card to the bank account directly using the online banking app. You can also transfer the money over the phone. However, you have to keep an eye on the daily and monthly transfer limit; therefore you should contact with the bank to get the latest information.
Last Updated on August 7, 2022 by Ana S. Sutterfield
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.