What is the difference between a debit card and a credit card?

A debit card spends money already in your bank account, while a credit card borrows money that has to be paid back, often with interest. They also give different protection when something goes wrong with a purchase.

Section 75 cover (credit cards): Over £100 and up to £30,000; The cash price of a single item or service bought at least partly on a credit card or with certain point-of-sale credit.; legislation.gov.uk: Consumer Credit Act 1974, section 75
Chargeback time limit: Usually around 120 days; Set by card scheme rules, not law. The period can be longer or shorter depending on the circumstances.; Financial Ombudsman Service: Section 75 and chargeback
Most you can be asked to pay for a lost or stolen card: £35; Unless you acted fraudulently or with gross negligence. Applies to unauthorised payments under the Payment Services Regulations 2017.; legislation.gov.uk: Payment Services Regulations 2017, regulation 77

Tax year 2026/27. Checked 22/09/2026.

How a debit card works

A debit card is linked to your current account. When you pay, the money comes straight out of your own balance. You are not borrowing, unless the payment takes you into an overdraft.

How a credit card works

A credit card lets you borrow up to a set credit limit. Each month you get a statement showing what you owe and a minimum payment. FCA rules require the minimum payment to cover at least the interest, fees and charges added that month plus 1% of the balance.

Interest is charged on what you owe according to the card’s terms, which also set out how purchases, cash withdrawals and balance transfers are treated and when interest starts.

The APR (annual percentage rate of charge) shows the total cost of the credit, including interest and required fees, as a yearly percentage. Because it includes required fees as well as interest, it gives one figure for the cost of borrowing.

If, over 18 months, you pay less off the amount borrowed than you pay in interest, fees and charges, FCA rules require the card provider to contact you about it. The FCA calls this “persistent debt”.

Section 75: protection for credit card purchases

Under section 75 of the Consumer Credit Act 1974, if something you buy on a credit card is not as described, faulty or never arrives, or the seller breaks the contract or misrepresented it, the card provider is equally responsible with the seller. You can claim against either.

It applies where the cash price of a single item or service is more than £100 and not more than £30,000.
It is the cash price that matters, not how much went on the card: paying only part (such as a deposit) on the credit card still counts.
It does not apply to debit cards or charge cards (cards where the full balance must be paid each month).

Chargeback: debit and credit cards

Chargeback lets your bank or card provider try to reclaim a card payment from the seller’s bank, for example when goods never arrive, are faulty or not as described, or a promised refund is not paid.

Chargeback is not a legal right. It is part of the rules of the card schemes (Visa, Mastercard and American Express), and a bank does not have to raise one. There are time limits: usually around 120 days, although it can be longer or shorter depending on the circumstances.

Payments you did not make

Under the Payment Services Regulations 2017, if a payment from your account was not authorised by you, your bank must normally refund it by the end of the next business day after it becomes aware. If a card was lost or stolen, you can be asked to pay at most £35, unless you acted fraudulently or with gross negligence, or the loss happened after you reported it.

Your credit record

Lenders, including credit card providers, can share information about how you manage credit with credit reference agencies. The three main ones in the UK are Equifax, Experian and TransUnion. Lenders use this information when deciding whether to offer credit.

You have a legal right to a free copy of the information a credit reference agency holds about you.

If something goes wrong

If your bank or card provider does not help with a section 75 or chargeback claim, or does not follow the right process, you can complain to it and then to the Financial Ombudsman Service, which is free.

Which way of paying fits a situation depends on circumstances. MoneyHelper offers free, impartial guidance on borrowing and credit.

Questions people ask

›Does section 75 cover debit cards?

No. Section 75 only covers credit cards and some point-of-sale credit. Debit card payments may be recoverable through chargeback, which is a card scheme process rather than a legal right.

›What is the section 75 limit?

The cash price of the single item or service must be more than £100 and not more than £30,000. It applies even if only part of the price was paid on the credit card.

›What is chargeback?

A way for your card provider to try to reclaim a debit or credit card payment from the seller’s bank under card scheme rules, for example if goods never arrive. It usually has to be raised within around 120 days.

›Does using a credit card affect my credit record?

Lenders can report how you manage a credit card, including repayments, to the credit reference agencies Equifax, Experian and TransUnion, and other lenders can see this when you apply for credit.

›What is APR?

The annual percentage rate of charge: the total cost of credit, including interest and required fees, expressed as a yearly percentage of the amount borrowed.

Related guides

Sources

This is information, not advice. Tax treatment depends on your circumstances and can change. For free, impartial guidance, MoneyHelper (backed by the government) can help; for a personal recommendation, speak to a regulated financial adviser.