Difference between a credit card and a debit card
Both credit cards and debit cards are personal financial instruments used in different ways. A credit card is a financial instrument that a person can use to make payments to merchants during financial transactions. What this means is that a credit card lends a certain amount of money to the cardholder, which he has to return with a fixed date and regularity. On the other hand, a debit card is a tool that a person uses to make payments directly from his bank account. There is no borrowing involved and the funds present in the account are used. It allows a person to limit his financial relationships.
Credit Card
- Lender's Friend: Credit card provides you with a loan, which you can use to make your purchases and pay later. This gives you the financial freedom you need.
- Great offers and discounts: A credit card can provide you with the opportunity to avail various offers, discounts, and rewards. This may include cashback, redemption points, and rebate facilities.
- Online Shopping: Credit cards allow you to shop online, allowing you to purchase your favourite items across the world.
- Secures Credit Score: Through well-planned payments, a credit card can help maintain your credit score, which in turn secures your financial position.
Debit Card
- Directly linked to bank account: The debit card links you directly to the bank account and you can use the money available in it.
- No credit required: Using a debit card doesn’t require you to take out any credit as your purchases are made directly from your bank account.
- Financial hygiene: Using a debit card helps you maintain financial hygiene as you do not have to bear the burden of borrowing.
- Control of your purchases: With a debit card, you can spend only the money that is available in your bank account, giving you control over your purchases.
- Experience Freedom: With a debit card, you can withdraw money directly from your bank account, giving you a feel of financial freedom.
Termination
Both credit cards and debit cards come with their own advantages and disadvantages. A credit card gives you the experience of financial freedom and discounts, while a debit card saves you from borrowing and is directly linked to a bank account. Depending on your needs and financial outlook, you can incorporate both and use them carefully.
Difference between debit card and credit card
use 1
Debit Card: A debit card is directly linked to a bank account and allows you to use the money available in that account. It can be used for shopping, online payments, and to withdraw cash from ATMs.
Credit Card: A credit card provides you with a fixed line of credit that you can use to make purchases or other transactions, and pay off later.
2. Objection and protection
Debit Card: If the debit card is lost or stolen, money can be withdrawn directly from the account. In terms of security, it has to be protected well.
Credit Card: Credit card is protected in many ways and if it is lost, you can immediately contact the bank and block it. In this also, more money cannot be withdrawn from your account
3. Loan
Debit Card: This is used to withdraw your available funds directly from your bank account, so you do not need to take a loan.
Credit Card: It provides you with a fixed credit line which you can use, but it has to be paid back later and if you don’t pay on time, you end up paying interest.
4. Credit score
Debit Card: Using a debit card is not able to help you increase your credit score.
Credit Cards: Using a credit card responsibly and making timely payments can improve your credit score, making you eligible for a loan in the future.
5. Termination
Both debit cards and credit cards come with different uses and benefits. A debit card is directly linked to a bank account and offers financial freedom, while a credit card offers you credit and can help manage your credit score. Depending on your needs, financial outlook, and usage habits, you can make the right combination of both and use them judiciously.