cc vs dc
- Credit Cards

Debit Card VS Credit Card

There are two types of card offered by banks to its customers for easy cashless transactions: debit card and credit card. These cards are a form of modern plastic money. Many people often get confused between the two and can’t decide which one to use and which one is better. But you can now clear all your confusion by reading all about credit and debit card here…

What Is Debit Card?

Debit card are a form of plastic money. These cards are given by bank to the account holder. The card is synchronized with the account of the customer. The card enables customers to withdraw money, make online payments and cashless payments at shops at minimal fees. The account holder can use only the funds available in his or her account to use debit card. The customers can use a debit card around the world.

What Is Credit Card?

Credit Cards are a type of modern plastic money. They come with a concept of buy now, pay later. Banks give these cards to the customers with specific eligibility and documentation to use for various personal reasons. By using these cards customers can pay for goods on credited amount by banks. In simple words, bank gives specific amount as credit or loan to the card holders to use for their utility. Customers can use this credit amount for their needs and pay back the borrowed amount to the banks before the next scheduled billing in lump sum or as EMIs. They can use a credit card around the world.

What are the Differences between Credit Card and Debit Card?

Category Debit Card Credit Card
Fund Functioning You can use the money or funds which are deposited in your account You can use the money or funds offered by bank as credit
Use of the Funds You can use  a debit card only if you have money or funds in your account You can use  a credit card even if you don’t have money or funds in your account
Effect on Credit Score Debit card usage does not impact your credit score If you pay your credit card bills regularly and on time, this can prove as a good credit score for future financial needs
Increase in Card Usage Limit As the funds you use are deposited by you in the account, there is not fund usage limit Your credit limit on the cards will change according to your usage
Earning Rewards You can earn reward points for using your debit card and the points can be redeemed to enjoy various discounts Credit card offers you a large structure of reward points, discounts, cash back etc.
Online Transaction Debit card is not a secured way to transact online as funds or money are immediately debited from account after transaction and if you cancel the transaction, reversal time is of minimum a week Credit cards are safe to use online as the funds or money do not deduct from your account immediately and you can file a report if any wrong transactions are done and won’t get charged for it

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