Dining out? Swipe the card.
Shopping? Swipe the card.
Refueling your car? Swipe the card.
Traveling? Swipe the card.
We see thousands of people relying on the facility of cards instead of cash. It is not only easy to carry but also a secure way of spending money. Although we have encountered people swiping cards at a number of occasions yet we are confused between the two terms: Credit card and Debit card. Hardly, people know the exact difference between the two types of cards. Following are the differences which will help you distinguish one from another.
Meaning of Debit and Credit card: Debit card is issued to you by your bank so that you can make any purchase or avail a service. The payment is made at the time of purchase which comes straight from your bank account. If you have money in your account you can pay otherwise you can’t. A credit card is also issued to you by your bank for the same purpose. However, the payment is made by the bank on behalf of you. If you don’t have money in your bank account it is okay. Your bank is supposed to pay for now.
The facility of payment: In case of a debit card, you are bound to pay then and there. It keeps your purchase limited because you get to pay from your own pocket. Nobody is supposed to pay on your behalf. You must have balance in your account for this purpose. In case of credit card, you can continue making a purchase and pay later. You are not bound to pay then and there for availing any service. Even if your bank account doesn’t have enough balance you can worry about it later.
Bank account: The most important condition to become a holder of a debit card is to have a bank account. No bank would issue you a debit card if you don’t have a bank account. In case of credit card, the issue is the opposite. Even if you don’t have a bank account you still can become a holder of a credit card. There is no such condition for credit cards.
Limits: The amount of money that you can withdraw depends on the amount of money you have in your bank account. No matter how much the amount is, the withdrawing limit is always less than that. In the case of credit cards, the withdrawing limit depends upon the credit rating of the holder.
Billing criteria: In the case of debit cards, there is no bill. Since all the bills are paid at the time of purchase, therefore, there is one bill less in the life of debit cardholders. In case of credit card holders, a bill waits for them. That bill is supposed to be paid within 30 days.
Interests: If the bill is not paid then interest is charged obviously. For debit cardholders, there is no bill and no interest.
Now that you have a clear idea about the two types of bank cards we are sure you can very well distinguish one facility from the other. Unlike others, you must be sure about the kind of facility you use or see others using.