Credit Card v/s Debit Card – Which One Should You Use
Check your wallet – it may have one debit card and one online credit card! The features, benefits, convenience, and security that they both provide may be hard to beat, but they are distinct from each other and impact your pockets. Let’s provide you some quick information which plastic money to swipe when in need!
Credit and debit cards look alike but are different
Credit and debit cards look alike, have 16-digit card numbers, expiry dates, PINs, CVV code and that’s where it ends. Debit cards let customers spend money by drawing wealth already available with the bank account. On the other hand, credit cards enable customers to borrow an amount or make a purchase from already sanctioned money limit set aside by the issuing company.
Advantages: Debit cards
Fees: Most of the customers want to use a debit card because it gives them a feeling of using ‘real money.’ If they want to transact for say Rs.100, they can swipe their debit cards for the said amount and pay nothing else in the form of fees. Whereas in the case of credit cards, one needs to pay an interest rate along with SGST, CGST, processing fee along with the totally utilized amount, making it an expensive affair.
Helps control the spending: A debit card simply uses the money that a person already has in his/her bank account. A lot of consumers know their limits and won’t go overboard with their spending as they know how much is left in their bank accounts. Hence, using a debit card checks the spending pattern and helps save!
Advantages: Credit cards
Split your purchase into EMIs – Unlike debit card transactions where you need to put an entire amount at once, online credit cards let you divide your transaction into affordable EMIs. An entire amount of your purchase is locked on your credit card limit and is split into EMIs as per your desire. The bill gets generated, and you need to pay only a portion of the total transaction amount each month which helps you never feel the burden.
The advantage of the minimum amount due payment: A credit card bill has two components – ‘total amount due’ and the ‘minimum amount due.’ A user can choose either of the two to make payments. In case a user does not have sufficient funds to pay the full amount, he/she has the liberty to pay the minimum amount due and escape being reported to the CIBIL authorities as defaulters.
The rewards: Although debit cards also have some rewards for making transactions, it is no match to the number of rewards one can reap on a credit card payment. Right from movie vouchers to airport lounge access to many more facilities, there are many facilities that you can redeem your points on your credit cards.
Liability for stolen cards: Even if your best credit card is stolen or misplaced, you can easily call the customer care of the issuing authority and get it blocked or reissued. Yes, debit cards can also be blocked and re-issued, but the formalities and turnaround time (TAT) for deliveries is more.
The Bottom Line
Prudent shoppers who can easily control their spending spree are the ones who should go for online credit cards as they can easily make the most its benefits. Debit cards carry no fees and let you encourage a saving pattern and makes you a disciplined spender. Thus, before you start thinking that you have – say Rs.50, 000 limit on your credit card, know that you need to repay it if you use the full amount thinking as yours!