Our life is connected with cards. Every day we need cards for withdrawing, transfer funds. During any purchasing, we call mini friend cards. But people misuse of cards due to unware about the definition of a debit or credit card.
Multiple cards, credit or debit peer use more and more but not the difference when the use of them. After using the credit card instead of debit, interest rate + fee per transaction charges display. Both look the same, plastic, a magnetic strip, issued by financial institutions.
But some differences people don’t know. Two section Debit card or Credit card, you will know how both are different from each other.
Debit card Works
When an individual makes use of the debit card, the amount of purchasing is deducted from saving account that’s linked to the card. The person is able to spend money that how much is left in their savings account not more than that.
Credit Card Works
When we use a Credit card, a loan is provided by the issuer bank for our purchasing and the essential requirement to repay the loan within a determinate time period. A credit card loan limit depends on Cibil score, income, paying capacity or etc…
Know the Differences by a Comparision Chart
|CREDIT CARD||DEBIT CARD|
|Meaning||The credit issuer provide a loan for |
purchasing things on the
|Debit cards is linked to saving accounts and capital deduct only from our saving account.|
|Implies||Pay later||Pay Now|
|Limit||The maximum limit of withdraw is determinated according to credit score of the person.||The maximum withdraw limit will less than our total saving capital.|
|Bill||The loan bill have to repay within a month||No bill, cause money directly cut from saving.|
|Interest rate||Interest rate apply when bill cross a specefic time period.||No interest rate apply.|
|Bank account||The bank account is not important for issuing a Credit Card.||Bank account is necessary for issuing a Debit card. Without any account it can not linked.|
The Definition of a Credit Card
It is a debt instrument that generates quickly loan from the third party to complete the transaction of customer. Then a specific time fixed to return the amount with interest rate or the customer has to repay the loan full loan amount. If they don’t pay, a due date is the last chance if it crosses, high charges apply. The limit of credit cards relies on the owner’s creditworthiness.
The Definition of a Debit Card
The Debit card service typically comes with saving or current account and issued by banks for purchasing against saving capital. While swiping the card, the redirection directly goes to saving the account or debit purchasing amount. Some monthly or annually debit card use charges we are eligible to pay.
The Bottom Lines
Carrying every time huge cash, checkbooks are impossible but our credit or debit cards solve this problem whatever we are going abroad. No circumstance in crowd or unsafe place of carrying card rather than cash in pocket.
Thieves can cheat or cards give full protection to capital. But you should use both cards in appropriate places. If you have huge saving please avert the loan. Some offers or discounts only available on credit cards.