Rank and salary
Relative to individuals with masters degrees, those with doctoral degrees have more opportunities to obtain higher-ranking positions with more independence. For example, a masters degree would enable you to get a job in marketing, but to become the head of marketing research at a company you would probably need a Ph.D. Likewise a masters degree would enable you to get a job conducting research, but to become the head of the lab (the person responsible for designing and overseeing all the studies being conducted) you would probably need a Ph.D.
Individuals with doctoral degrees also earn higher salaries, on average, than individuals with masters degrees, even when they have essentially the same job. For example, a privately-practicing therapist with a doctoral degree can charge/earn more than a privately-practicing therapist with a masters degree.
Preparation for particular kinds of careers
A Ph.D. is usually required for a career as a professor, or as the head of a research lab. However, note that many other positions can be held with either a masters or a doctoral degree.
Amount of credits/time required to complete the degree
A doctoral program takes a minimum of 4 years, while a masters program takes approximately 2 years. Often people in doctoral programs will receive a masters along the way, after about 2 years.
Research focus during graduate school
Doctoral programs in psychology are highly research oriented, and require a doctoral dissertation on research you conduct. Masters programs in psychology and related fields may or may not be particularly research oriented (it depends on the program).
Who pays for graduate school
Ph.D. programs often provide funding to cover the cost of tuition, and offer their students research assistant and teaching assistant positions to help pay for living costs while attending graduate school full time.
Masters programs provide relatively limited funding for students. Many of them do not cover tuition costs or offer research/teaching assistant jobs. On the other hand, masters programs often offer part-time options, so students can take courses while earning money at a job.
Applications to doctoral programs often involve applying to work with a particular professor who would become your research advisor/mentor as well as your primary source of funding. You’d first explore various professors’ research interests, read their papers, and find out if they will be taking any new students to work with them. When you apply, you’d write a different essay for each school explaining your own research ideas and skills and highlighting how they would make a good fit for a particular professor’s labs.
When applying to masters programs you’ll still want to familiarize yourself with the departments you are applying to, but there is there rarely a need to apply to work with specific potential mentors at each school.