It is now the case that the normal bank card is often no longer sufficient. If you want to order something on the Internet or are about to travel abroad, you can hardly get around a Master or Visa card.

The terms debit and credit card come up again and again, and the question arises what the difference between the two actually is. This article explains exactly that!

One card, over 50 currencies! And without exchange rate surcharges.
With the TransferWise multi-currency account, you can say goodbye to bad exchange rates once and for all! Hold over 50 currencies and pay conveniently with your Debit Mastercard. You get it for only 6 EUR with your free account.

All conversions are always done at the average exchange rate. In other words: no hidden costs if you have to pay somewhere in a foreign currency!

What is a credit card?

As the name "credit card" suggests, such a card gives you a credit. So you can spend money that you might not have. The payments are then first taken over and in most cases withdrawn at the end of the month from your bank account.

The limits can be quite different. Often credit cards are limited to a few thousand euros per month, while there are also credit cards with which you can easily pay several million.

How does a debit card work?

Debit means as much as "debit". The debit card is therefore the classic EC card that you get from your bank to withdraw money from ATMs. Such a card is always linked to a bank account, so that the amount to be paid is debited directly from one's own account.

A debit card at your local bank can also be overloaded in certain cases, i.e. you can spend money here that you don't actually have. However, this requires an agreement with his bank advisor and the interest that the bank takes for lending the money is usually very high, which is why a credit card may make more sense. But you should also look at what exchange fees his bank charges, because it quickly becomes expensive here.

Why does it say "Visa" or "Mastercard" on some debit cards? Aren't they actually credit cards?
In order to make online payments or withdraw money abroad, a Mastercard, Visa card or similar card is necessary. However, credit cards also have some disadvantages.

The money is advanced and debited from your account at the end of the month. For this advance you often have to pay not exactly low interest. In addition, you may prefer to have the money directly debited, so you know exactly how much money you still have available.

A Debit Mastercard combines the advantages of a credit and debit card and is therefore an interesting alternative to them. With this you can pay everywhere where Mastercards are accepted and the money will be debited directly from your account. Whether it's a debit or credit card, it doesn't matter whether you use it at ATMs abroad or in online stores.

Which card should I buy?

Which card you should get depends on yourself and your needs.

If you travel abroad a lot, a credit card is often a good choice, because it usually has favorable fees, but above all, a credit card usually comes with additional services that can be quite interesting. Many credit cards include a foreign health insurance or free business lounges in airports. With a gold or platinum card, you can often travel completely without bank fees. But they often cost over 100 EUR in annual fees, which is not worth it for everyone.

The classic debit card, i.e. the EC card that you get from your local bank and that is not a Master or Visa card, is only suitable if you want to withdraw money in Germany. Online payments can not be made with these and abroad you can either not withdraw money or the costs are enormously high. If you want to withdraw money from an ATM of another bank, this is either not possible or can be expensive.

The modern debit card, i.e. the card that is also a Master or Visa card, is a middle ground between the two cards. With this you often have, at least up to a certain withdrawal limit, free withdrawals at ATMs in Germany. You can also use ATMs from different banks, which is very convenient for domestic travel. If you withdraw money abroad, this is also possible without any problems and you often have an allowance to be able to withdraw money free of charge. Online payments are also possible without any problems.

The TransferWise Debit Mastercard. The real exchange rate, always.
TransferWise is a payment processor that helps people all over the world send or receive money in different currencies, and TransferWise always uses the real exchange rate.

You can open multi-currency accounts in over 50 different currencies at TransferWise in just a few minutes. For these accounts, TransferWise also provides a free Mastercard debit card. The card offers many interesting advantages.

Unlike almost all credit cards, you don't have to pay recurring monthly or annual fees for the TransferWise Mastercard. You can also make payments in any currency and at any location without hidden exchange fees. Payments in available currencies on your multi-currency account and cash withdrawals from ATMs worth up to 200 EUR per month are free of charge.

Payments are made directly from your account, so you need to have money in your TransferWise account. In the app you can see how much money you have withdrawn, which can be helpful when making payments in foreign currencies. So fees and exchange rates are completely transparent!

Conclusion on credit cards and debit cards

In the end, whether you choose a credit card depends entirely on your own needs. Meanwhile, you can, for example, with the TransferWise Mastercard debit card, go a middle way, which in most cases saves costs. Especially if there are no monthly fees, such a card offers an interesting alternative as a main or even a secondary card.