Credit vs. Debit Card
What is Difference between Credit and Debit Card? Understanding the difference between a credit card and a debit card allows us to make the decisions related to our finances in a much wiser way. There are a lot of people who get confused about it and when they visit a bank they do not know exactly what type of card to apply for and the implications of choosing one or the other. Both cards are accepted in the same places and both (depending on how they are used) can bring benefits to the user; however, there is a fundamental difference between debit and credit cards that should not be ignored.
Difference between Credit and Debit Card
If you also have doubts about it or simply seek to be better informed, continue reading below, as we then tell you everything you need to know about this topic. This post is actually all about the Difference between Credit and Debit Card.
This type of card offers the benefit of credit, but works differently than the other type. The way they work is by extracting the money directly from your account, that is, it can only be used if you have money deposited in the bank. When you make a purchase using your debit card the amount of money or the price that you have to pay for the good or service is not taken “from the pocket of the bank”, but yours.
The transfer of money made by the bank to the seller or merchant can be carried out within several days in some cases. In this case, it is important that the user is always aware of the balance of his account, in order to avoid being refused to pay with his debit card.
On the other hand, what basically makes this type of cards is to borrow money from the bank in order to pay for purchases and services that the user requests.
Generally, the amount of money that can be withdrawn using them is limited, but for some users some extra benefits are offered that include the availability of a larger sum of money. Also, depending on the bank, sometimes offers and contests are held in which customers could be rewarded if they make good use of their credit cards. When using the credit card, you have to pay the money used plus an interest rate set by the bank when payments are not made on the stipulated dates.
Finally, it is important to note that the fundamental difference between a credit card and a debit card lies in the fact that the former does not withdraw money from your own account, but from that of the bank; which is why failure to pay the debt acquired on time brings different kinds of warnings or penalties.