Credit card & debit card both makes it easy to purchase goods without carrying bulk of cash in the pocket. But have you ever wondered which of these plastic cards is better and which one you should prefer?
Difference between credit card and debit card
There are a number of people who have option to use one from the credit card and the debit card. And they simply use the credit card. Why? Maybe they do not have knowledge about the debit cards.
They use their credit card thinking that using credit card or debit card is one and the same thing. No! If you think the same then you are thinking so wrong. There is a significant difference between both these plastic cards. So what is the difference? And which one is better? Come let’s find out answers to these questions.
Whenever you use credit card, you are borrowing money from your bank. Every time you swipe your credit card you take a loan from your bank or any other financial institution. And you promise to return the money which you’ve borrowed by the end of the month or whenever the bill is being sent at your home and that too with a specific amount of interest.
While on the odds a debit cards are like the digital version of the checkbook; the debit cards are directly connected to your bank account (mostly the checking account) and the money is debited i.e. withdrawn from your account whenever the transaction happens. The debit cards can also be used as ATM card for the withdrawal of money from ATMs. In simple words whenever you use your debit card to purchase something, you use the money available in your bank account unlike the credit card transactions where you take a loan from your bank or any other financial institute.
Which card to prefer?
Maybe even after reading all above mentioned information it is not clear to you that which card is better and which one you should prefer. Both the cards have their own advantages and disadvantages but it’s up to you how careful you are while using the cards irrespective of their type.
Overall, it can be concluded that debit cards are like an open wallet if not taken care properly, it can empty your bank account in just one blink of eye, while the credit cards offers more protection to the customer and also add more credits to your account that help you to get loans for vehicle and mortgages at favorable term (low interests rates).