A debit is an entry that increases an asset or expense account and decreases a liability or equity account. When you use a debit card, the money is directly taken from your bank account, reflecting an immediate transaction. A credit, on the other hand, is an entry that increases a liability or equity account and decreases an asset or expense account. When you use a credit card, you borrow money from a financial institution, which you will need to pay back later, often with interest.