Do you want to learn the differences between a credit card and a debit card, though both have similar functions which can be used to make purchases without paying in cash or writing a check but they are not the same.
This post will provide the Difference Between Credit Card And Debit Card at a glance we will also take a look at Advantages and Disadvantages.
What is Credit Card
Credit cards allow cardholders to borrow money from the card issuer up to a certain limit to purchase items or withdraw cash. This Can be used on all merchant outlets and online.This gives you access to a line of credit issued by a bank, while debit cards deduct money directly from your bank account.
Card holders get rewards when they’re used such as discounts, travel points, and many other perks unavailable to debit cardholders…. It also provides a financial backup in case of an emergency such as an unexpected job loss, hospitalization or car repair. Some consumers use them to pay bills
Using a credit card responsibly helps boost your credit score with a history of expenditures and timely payments and by keeping their card balances low relative to their card limits. You get a bill or statement each month with details of the transactions you have made.
Credit cards have multiple fees applicable,these include joining fees, annual fees, late payment fees, and bounced check fees among others. Most credit cards offer 100% lost liability protection. So, you are not liable for any unauthorized transactions made.
What is Debit card
A debit card is linked to your account and it’s used to make purchases. When you use your card, the cost of the item you’re buying is automatically deducted from your account to pay for the goods and service.
This can help you keep your spending in check, since you usually need the money available in your bank account if you want to use the card to pay for things. Many credit cards charge an annual fee, debit cards don’t.
Debit cards give you easy access to your cash. You can use your debit card to withdraw cash from ATM machines. Some retail stores will also allow you to get “cash back,” charging more than your initial transaction to your checking account and giving the cash to you with your receipt.
With debit card, You can access any amount up to what is currently available in your savings
bank or current account.while credit card you get up to the pre-set credit limit on your card
Credit cards carry some additional protections that debit and ATM cards do not have. If a credit card is lost or stolen, under the Fair Credit Billing Act, the maximum liability is $50. If the missing card is reported before any fraudulent charges are made, there is no liability at all.
Using a debit card also helps free you from the interest burden that can come with using credit card. Unless you’re paying off the balance every month, whatever charges you make accrue interest. And that can end up costing you a lot.
With debit card, you won’t earn any points, or cash back on purchases made with your card. Because rewards can save you money, depending on how you redeem them, you could be missing out if you only spend with a debit card.