The current era is the digital age. So all the systems in the digital age have to be digital. And so we want education, medicine and even banking to be done through transactions and digital methods.

Cost of Capital : Part - 01

The use of cards in transactions is increasing day by day. The card can be used to pay everything from shopping to food bills without any hassle. However, there are different types of cards. There is no end to the debates over debit and credit cards. Although debit and credit cards seem to be the same, there is a big difference. So friends, let's take a closer look at those differences.

01. What is a debit card?

A debit card is a plastic card through which a user can spend money deposited in a bank. This card is commonly known as a bank card or check card. It is usually used as an alternative to cash when shopping or eating at a restaurant. Many people call this card an electric check.

02. What is a credit card?

Although similar in appearance, it is the complete opposite of a debit card. With this card, the user can take a loan from the bank and spend. And the money has to be deposited in the bank within the stipulated time.

03. The difference between a debit and a credit card

Hopefully you have gained some idea about debit and credit cards from the above discussion. So this time we will know the differences between debit and credit cards.

Credit Card vs. Debit Card

  1. The main difference between a debit and a credit card is that you can spend money deposited in a bank with a debit card. And with a credit card you can get a loan from a bank.
  2. Debit cards are called cash cards. Credit cards, on the other hand, are called loan cards.
  3. In the case of debit cards, the bank pays the planet a profit on top of its money. On the other hand, in the case of credit cards, the customer pays the bank a profit on the money spent.
  4. EMI facility is not available on debit card. Credit cards, on the other hand, offer EMI benefits.
  5. Debit card users do not have to pay any processing fee. On the other hand, credit card users have to pay various fees including joining fee, processing fee, late payment fee, annual fee.
  6. Savings or Current Any customer can collect David Card. On the other hand, no one can collect credit cards if they want to. He has to collect the credit card by fulfilling the specific conditions of the bank. Such as whether he transacts regularly, how much he owes to other banks, etc.
  7. Many places online do not support debit cards. But payments can be made using credit cards everywhere online.
  8. No monthly statement is issued to the customer in case of debit card. Credit card customers, on the other hand, are given a monthly statement regarding their transactions.
  9. In case of using the fund, the debit card customer can only use the balance in his account. But the credit card holder can use the pre-approved amount from the bank. However, if the credit card holder has a high credit score account or corporate account, he is allowed to use a large amount of money.
  10. It goes without saying that there are no significant benefits in the case of debit cards. On the other hand, in the case of credit cards, you can enjoy benefits like cashback, discounts and reward points.

04. Important Advantages of Credit Cards?

Credit cards can:

  • Help you build positive credit history (when managed properly)
  • Provide protection if your card is lost or stolen
  • Offer rewards on purchases you’re already making
  • Provide additional benefits, like extended warranties on electronics
  • Give a “free” month-long loan (when you pay your bill in full)
  • Provide more flexibility when booking a hotel or renting a car

05. Abstract

Basically a debit card is like a pre-paid SIM which means you can use it as long as you have balance in your account otherwise you cannot use this card. Credit cards, on the other hand, are like a post-paid SIM. With this card, you can borrow from a bank and spend as much as you need.


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