A credit card is a type of payment card that provides a line of credit to the cardholder. The issuer essentially loans money to the cardholder for every purchase that is made, and the cardholder is expected to repay the issuer at the end of each statement cycle.
What is the Difference Between a Credit Card and Debit Card?
While both credit and debit cards eliminate the need to pay with cash, they are not the same.
The primary difference is where the funds come from. Credit card purchases are charged against a line of credit. Debit card purchases withdraw money directly from a bank account.
Processing fees vary slightly depending on whether a debit or credit card was used to finalize the transaction.
When it comes to fraud and chargeback management, debit and credit card transactions are essentially treated the same. One notable difference is Mastercard’s dual message system and single message system — transactions that are authorized with PIN credentials have different chargeback reason codes than those processed with signature confirmation.