Credit Card vs Debit Card in Australia

By the Aussie Credit Guide editorial team · Reviewed 5 October 2026

A debit card spends your own money. A credit card spends the provider’s money, which you repay. Almost every other difference follows from that.

Side by side

Fraud and disputes

Both card types are covered by the ePayments Code where the provider subscribes to it, which limits your liability for unauthorised transactions you didn’t contribute to. Both can also use the card scheme’s chargeback process. The practical difference is whose money is missing while a dispute is investigated: with a debit card it is your own. See disputing a transaction.

What a credit card adds

• A buffer between a fraudulent transaction and your bank balance.
• Interest-free days, which let you pay for purchases up to several weeks later at no cost if you pay in full.
• Rewards points or cashback on some cards.
• Complimentary insurance on some cards, subject to conditions.
• A repayment history on your credit report.

What a debit card avoids

• Interest and the risk of carrying debt from month to month.
• Annual fees.
• A credit limit that reduces how much other lenders will lend you. See how credit limits work.

Using both

Many people keep a debit card for everyday spending and cash, and a credit card with a modest limit for online purchases, travel bookings and larger items, paid in full each month by direct debit.

Related guides