Guide to Using a Credit Card Like a Debit Card

Both credit cards and debit cards may be used to pay for purchases. However, they work in different ways. With a credit card, you’re making the purchase on credit with the understanding that the lender gets repaid at a later date. With a debit card, you’re making the purchase with funds in a linked bank account. Both options have pros and cons. But can you use a credit card like a debit card?

Technically, no. Credit and debit transactions are processed in different ways, so you can’t use a credit card as a debit card. However, you may use a credit card in a way that allows it to function like a debit card, giving you the advantage of both types of cards in one. Here’s what you need to know. 

What You Can Do With a Debit Card

While credit and debit cards are used in similar ways, there are several things that you may do with a debit card that you can’t do with a credit card (or at least not effectively or affordably). Here’s a closer look. 

Cash Withdrawals From ATMs

Debit cards are linked to a bank account, typically a checking account and function as payment cards as well as ATM cards. You may typically use your debit card to get cash at an ATM without paying a fee, provided the ATM is in the bank’s network.

The same can’t be said for credit cards. While it’s possible to get cash at an ATM using a credit card, the funds won’t come from your bank account. The transaction is considered a cash advance (or loan), which comes with fees and interest.

Get Cash Back From Cashier

Some merchants allow you to get cash back when you use a debit card at checkout. To do this, you simply authorize payment for a higher amount than the purchase total, then get the difference as cash. This may be handy if you need cash but don’t want to make a separate trip to an ATM (or there are no in-network ATMs nearby and you want to avoid paying a fee).

Generally, you can’t get cash back when you use a credit card to pay for a purchase in a store.

Make Debit Payments

When you use your debit card to pay for something, the funds get debited from your bank account, typically right away. When you use a credit card for payments, the transaction is processed as a credit card payment, and the money comes from the card issuer's bank rather than yours. This is a loan. However, if you pay your credit card bill in full by the due date, you won’t pay any interest on that loan.

Can You Use a Credit Card Like a Debit Card?

Not exactly. Your credit card isn’t linked to your bank account, so you can’t use it in precisely the same way as a debit card. It’s always processed as a credit card, and the funds never come directly out of your bank account. 

That said, you may use your credit card like a debit card by only making purchases you’re able to afford and paying off your balance in full each month. This makes it more like a payment card than a credit card since you won’t accrue debt or pay interest. You may still be using a credit card, and the transactions are still credit transactions, but this simulates the way debit cards are used. 

Should You Use a Credit Card Like a Debit Card?

Ideally, yes. Many savvy credit card users only use their cards to pay for things that they have the funds to cover. And every month, they pay their entire statement balance in full to avoid interest charges. This is similar to how a debit card is used, and it’s generally the least expensive way to use a credit card. However, there are some disadvantages to using a credit card vs. a debit card. Here are two to consider.

Higher Fees

Many credit cards charge annual fees, as well as fees for late payments and cash advances. There’s typically no annual fee for a debit card, though some charge out-of-network ATM and overdraft fees. 

Interest if You Don’t Pay Your Balance in Full 

You may avoid interest charges if you pay off your balances in full each month. But if you fail to pay the entire statement balance, or if you pay late, interest applies to the unpaid balance (and possibly a late fee).

When Not to Use a Credit Card Like a Debit Card

You may not want to use a credit card like a debit card at an ATM. Although you’re generally able to use a credit card to get cash, it’s treated as a cash advance (which is a short-term loan). As a result, you not only need to repay the money you withdraw but likely also get hit with fees and interest. 

What’s more, the annual percentage rate (APR) for a cash advance is often higher than it would be for a typical credit card purchase and usually kicks in right away, meaning there’s no grace period as there usually is with purchases.

Tips for Using a Credit Card as a Debit Card

If you want to use a credit card as a debit card, here are some things to keep in mind. 

Choose a Credit Card With Low Fees and Interest Rates

All credit cards are not created equal, so it may pay to shop around and compare credit card rates, along with terms, fees, and benefits.

If you plan to use the card like a debit card, you may want to choose a credit card that has no (or a low) annual fee, as well as a low APR. While you may not be planning on carrying a balance and getting hit with interest, you occasionally might. If and when that happens, you may want to pay as little interest as possible.

Pay the Balance in Full 

The key to using your credit card like a debit card is to avoid interest charges by paying your statement balance in full and on time every month. One way to ensure this happens is to set up autopay. You won’t have to remember your due date or take the time to log into your account and pay online or mail out a check each month.

Pros and Cons of Using Credit Card Like a Debit Card

The Takeaway

You can’t use a credit card as a debit card because it’s not linked to your bank account. However, you may use it in a similar way to a debit card by paying your bill in full each month. This gives you the benefits of a debit card (convenient, cost-free payments), plus any benefits that come with a credit card, such as cashback rewards and points. 

If you’re currently thinking about getting a new credit card, Lantern by SoFi may be able to help. With our credit card marketplace, you can view multiple credit card options without scouring the web and checking multiple sites. You just need to fill out one short application, and checking your rates won’t affect your credit score.