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What’s the difference between a debit card and a credit card?

A debit card is linked to your bank account, that means money is taken automatically out of your account when you transact with the card. This means in order to use a debit card, you’ll need to have money in your account(1). Interest does not apply to debit card transactions as the money is sourced from your transaction or savings account. However, account fees and charges may apply.

How do credit cards work?

Although credit cards are often thought of as a piece of plastic, in reality they’re a credit facility with a prearranged limit. You can spend up to this limit and pay it back at a later date. All the purchases you make accumulate on your account.  You’ll then get a statement each month stating your minimum repayment amount.

You can either pay off what you owe on each month by the due date on the statement, or you can pay the minimum amount on the statement and make repayments over a longer period whilst interest accrues on the balance.  Some credit cards can have an interest-free period attached; otherwise you’ll pay interest on the outstanding amount. That means the sooner you can repay what you owe, the less interest you’ll pay on the outstanding amount.

Are credit cards and debit cards used the same way?

Credit cards and debit cards operate with similar functionality. That means if you’re paying for groceries at the supermarket, you’ll either tap your card (for a contactless payment) or swipe and use your PIN number the same way whether you’re using a debit card or credit card.

What about security?

If you’re using a Westpac debit Mastercard®, you’ll have the same security protection that you’d get if you were using a Westpac credit card. This includes the Westpac Fraud Money Back Guarantee2 which ensures that any unauthorised transaction claims will be reimbursed provided that the cardholder hasn’t contributed to the loss and has reported it to Westpac promptly.

With both Westpac credit card and debit cards you’ll also get chargeback protection, which may reverse transactions if you’ve been overcharged or don’t receive the goods you’ve paid for. Find out more about this here.

Things you should know

This information does not take your personal objectives, circumstances or needs into account. Consider its appropriateness to these factors before acting on it.

1. Customers must be 16 or older and have an Australian residential address to be eligible for a Debit MasterCard®. If you’re not eligible, you may be offered a Handycard to access your account.

2. Westpac Fraud Money Back Guarantee ensures that customers will be reimbursed for any unauthorised transactions provided that the customer has not contributed to the loss and contacted Westpac promptly. Refers to the cards’ terms and conditions for full details, including when a customer will be liable.

Mastercard and the Mastercard Brand Mark are registered trademarks of Mastercard International Incorporated.