What is the difference between Debit card & Credit card?
- Asked By
- Updated On:28-Jan-2021
- Replies:3
Short Answer
Debit card vs. credit card - Which one to use? There are a lot of differences such as the repayment options, interest, EMI facilities, purpose, charges and benefits.
Detailed Answer
We all are fond of using debit cards and credit cards as well. But, have you noticed what's the exact difference between a debit card and a credit card in general? Let's look for some key differences between these two instruments.
Debit card vs Credit card:
1. Which funds can be used?
Debit card allows you to use funds available in your savings/current account only. While Credit card can be used upto the credit limit sanctioned to you in your credit card account. The lender sets a specific credit limit over which you cannot use your credit card.
2. Interest:
Interest is charged on the outstanding balance in your credit card account. You are basically using the lender's money to make payments. This is not applicable in a debit card.
3. EMI facility:
Your credit card shall offer you an EMI facility whereas a debit card doesn't give such an advantage.
4. Repayment:
You have to repay the credit that you have utilised while using your credit card. You need to clear your credit card bill in time to avoid any interest charges. However, when you use a debit card, that's basically your own money in your bank account. So, nothing to repay in that case.
From safety point of view, what I feel is that using a credit card is still better than a debit card especially while making online purchases.
What other key differences can you spot between a debit card & a credit card? Do jot down your observations here.
Ask Your Query for FREE, Get quick answers from our FINTRAKK community!
Discussion (2)
I normally use a credit card only while shopping online or at stores. That gives me some cashback also. I get some credit period and don't have to immediately clear dues. But, I usually clear my credit card bill on time.
Credit cards have many advantages, including the fact that they are more secure than debit cards. They come with benefits like no-cost EMIs, insurance coverage, and lounge access at airports
To open a savings bank account in your chosen bank, you will need identity proof, address proof, and a recent photograph. Documents like PAN Card, Aadhaar Card, Passport among others will be needed in the account opening process.
PNB accounts cannot be closed online. To close the account, go to the bank branch where you opened your bank account. Submit a duly filled and signed account closure form to the bank manager.
If you are a Zerodha customer, you can apply for IPO online through Zerodha Console (Zerodha Back-office). The process for applying an IPO process has been explained in detail above. Here are few other answers to important queries that you may want to learn.
State Bank of India is the leading government domestic bank in the country and provides various services in almost all parts of the country. However, an individual with SBI account has to visit the branch in order to close the acount. Go through the post to understand the procedure.
Indian Bank account cannot be closed in online mode. However, you can close it by submitting the account closure form in offline mode to your Indian Bank branch.
Wise is one of the cheapest ways to send money internationally as compared to other available options in India. The only limitation of Wise is that it does not integrate with e-commerce online payments.
Student credit card is quite a new concept in India. The concept is getting popular nowadays. Many credit cards are available such as SBI Student Plus Advantage Credit Card, HDFC Bank ForexPlus Card, ICICI Bank Student Travel Card, HDFC Multicurrency Platinum ForexPlus Chip Card and so on are available.
CIBIL is your credit worthiness report. Before giving any loans or credit cards, banks check your CIBIL score to get an idea of you loan repayment capacity.
The ideal amount of credit cards that one could have is two cards. Should one have more than two credit cards? Beyond that, it seems necessary.
shikha
Thank you for telling the main differences between a credit and debit card. Most of the people don't know about the difference between them. This article can help them to understand the uses of credit and debit cards. They might use the credit card more often now as it helps to pay the payment more easily. I also prefer using a credit card only while shopping.