In today’s world, banks are offering a lot of facilities. Among all of those high-end benefits, credit cards and debit cards are really unbelievable. These two come with a bunch of benefits and features that can help you in solving financial issues. Also, these two are helping the digital financial market in a few ways. You can also make use of various money sending app in association with credit or debit cards. Some online money lending apps also help you to pay your credit card bills directly. So, the possibilities of these cards are endless.
Here, in this article, you can find the details related to credit and debit cards.
What is a credit card?
A credit card is basically a way of borrowing money from a financial institution or bank. Here, the bank or the financial institution works as a lender. With the help of a credit card, you can simply borrow up to a predefined credit limit. You can make any kind of purchase like goods, services, etc. You do not need to cash because you can get emergency funding through these cards. Based on your income and previous loan repayment details, you can get a credit limit. Basically, the credit limit is completely dependent on your credit score or creditworthiness.
The only thing you need to know is you need to pay the credit card bills on time. Failing credit card on-time bills, you may end up giving penalties or late fees.
Benefits of credit card
There are a lot of benefits of credit cards as mentioned below.
- You can go for a hassle-free shopping experience with the help of a credit card. You can even do all kinds of online purchases with your credit card right from your own homely comfort. You can also maintain your monthly budget with the help of your credit card.
- You can pay all EMIs or loans with the help of your credit card emergency fund.
- You do not need to carry cash for shopping from physical stores. If you do not have enough cash to do shopping, you can simply put it on your credit card. So, basically, you can go with the cashless transaction with your credit card.
- In case you need to withdraw amounts of cash, you can do that easily with a credit card.
- Credit cards are universally accepted. No matter if you are traveling to any foreign country, you can make use of your credit card to pay bills. There are no such time boundaries to use your credit card efficiently.
- You can increase your credit score by repaying loans and credit card bills on time. Credit scores can make you eligible for any kind of huge loan whenever required.
What is a debit card?
Debit cards are another vital feature that is directly connected to your savings account in the bank or financial institution. You can use that card to access your account electronically. You can directly deposit, withdraw, or send money from your bank account with the help of this payment card.
As a debit card user, you can go anywhere to purchase any goods or services without carrying cash. Also, the card offers various security measures such as a personal identification number (PIN).
Benefits of debit card
Debit cards also provide a good range of benefits to its owner.
- Debit cards are easy to get. You have to request a debit card when you are opening your savings account or current account.
- Debit cards are a good alternative to cash. You can swipe your card at any store to purchase their goods or services. Also, online mobile bill payment can be done simply by entering the card details.
- A debit card does not work with credit. It is a simple bank account card which means there is no credit limit for using it. You will have an idea of how much money you have in your bank account.
- Debit cards offer the utmost safety. It comes with a digital chip, 4-digit pin, magnetically active bar, etc. Without the card pin, no fund transfer is possible.
Difference between debit card and credit card:
|Debit card||Credit card|
|It deducts money directly from your bank account.||Credit cards lend money for your purchases.|
|In this case, you know how much you can spend.||You can spend without any such limit.|
|A debit card does not charge any bill after usage.||Credit cards charge a fee along with the bill for mobile payment.|
|For a debit card, you need to pay the annual fee to the bank.||For credit cards, you need to pay joining fees, annual fees, extra credit limit fees, etc.|
|There is no need to pay any interest for using this card.||You need to pay interest on your borrowing amount on a credit card.|
|Usually, there are no reward or loyalty programs offered by debit cards.||Credit card owners can enjoy a lot of loyalty rewards to redeem.|
Both debit and credit cards are useful in different ways. These two payment cards are the best way to enter the world of digital payment with their online payment features. Also, there is no such fear of theft or hacking because of their ultimate safety measures. These days, you can also connect your debit and credit cards to various bill payment apps for better usage. Get the most out of these cards for seamless payments.