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

A debit card provides access to your own money held in a transaction account. A credit card is a loan provided by your bank that gives you access to funds or ‘credit’. This becomes a debt and you will need to repay the minimum balance each month.

Spending your own money versus the banks is one of the key differences between a debit card and a credit card. Find out more about our low rate Visa credit card, or to easily access your own funds, check out the features of our Visa debit card.

How Do Debit Cards Work?

Debit cards are used to access funds directly from the account they are linked to. You can only spend what is in your account. For example - if you try to spend $500 but only have $250 in your account, your transaction will be declined.

You’ll need to keep an eye on your balance, as you might face overdrawn fees if you try to spend more money than is in your account.

Debit cards can be used to withdraw cash directly out of your bank account at ATMs. Know your transaction fee allowance to avoid any unnecessary costs prior to withdrawing money.

You can be confident that our debit card offers security from Visa, so you can make secure purchases at the counter or online. You can easily apply for a Visa debit card from Horizon by calling or visiting any of our branches. You can also apply for a Visa debit card online and one of our friendly staff will process your application.

A feature of our debit card is having access to an overdraft facility. You can apply for an overdraft which will provide you access to extra funds in case of emergency. This is a form of credit that will need to be paid back monthly.

How Do Credit Cards Work?

Your credit card, unlike a debit card, is a loan. When you apply for a credit card, you're approved for a certain amount, which is an ongoing line of credit.

The amount you’re approved for is known as your credit limit and it’s how much you can spend before your card is ‘maxed out’. If you reach this threshold, you won’t be able to make any further purchases until you make a credit card repayment.

Each month, you'll receive a statement from us which will include:

  • Your opening credit card balance

  • Total amount spent on purchases

  • The total amount of cash advances

  • Payments, refunds and other credits

  • Total interest charged

  • Fees and charges – for example, any late payment fees

  • Your closing balance

When making a repayment, you’re required to cover the minimum payment (and not the whole balance) however you'll typically pay higher interest on your closing balance in the long term.

To easily manage repayments, set up a regular direct debit to your credit card account to avoid a late payment fee. You could also ask us to set up a payroll split, so when your pay comes in, a portion will go directly to your credit card.

Read our blog on how credit cards work which includes tips on how to use one effectively.

You can apply for a Visa credit from Horizon by calling or visiting any of our branches. You can also apply for a Visa Credit Card online.

What about security?

We take the security of your funds very seriously. If you suspect a fraudulent transaction on any of your accounts, please notify us immediately. Taking control of card security is also in the palm of your hands. You can lock or unlock your card from within Horizon’s mobile banking app.

Locking your card suspends any further transactions from occurring until you unlock it again from within the app. You can also report your card lost or stolen from here as well and we will order you a replacement.

Shopping online is secure as Visa has developed a program that helps confirm your identity when you make an online purchase. During an online purchase from your desktop, mobile or other digital devices, you may be guided through an extra check to verify your identity.

This helps us ensure it is you making the purchase and better protects you from fraud. This is the one way Horizon Bank and Visa have teamed up to secure your account(s).

Which is better? 

Whether you choose a debit or credit card is a matter of personal preference in how you prefer to spend your money. At the end of the day, a debit card is your own money and a credit card is a loan from your bank or financial institution.

If you believe you can manage the repayments on a credit card, then use our budgeting calculator to see how repayments will fit into your spending. A debit card will always be you spending your own money, however, you can apply for an overdraft to have access to extra funds in case of emergency.


Get in touch with the team at Horizon Bank to learn more about whether a debit card or credit card is best for you. With convenient locations across the Illawarra and South Coast regions, we are happy to help you with any questions you may have about debit and credit cards.

Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.

The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant Product Disclosure Statement and Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.