What is the Difference Between Credit Card And Debit Card

A credit card is a type of payment method that is distributed by both banks and non-banking financial institutions. It allows you to make purchases from both online and brick-and-mortar shops and then pay for them later. This defines the meaning of a credit card.

Every credit card has a pre-set credit limit. Once you've used up all of your credit card limit, you won't be allowed to make any more purchases with the card until you've paid back what you've spent. Your credit score, credit history, and income are just a few of the many factors the issuer considers when deciding the credit limit for your credit card.

Your credit card company will also send you a credit card statement each month, which will include information about your transactions, the amount you must pay, and the payment due date. It's crucial to pay the balance due on the statement on or before the time. If you do not pay your credit card bills on time, you will be charged interest on the unpaid balance.

Now that you know the meaning of a credit card and how it works, let us see how it differs from a debit card.

Difference between Credit Card & Debit Card

A debit card and a credit card are distinct from one another in a number of ways. Check out the major differences between a debit card and a credit card.

Fund Origin

When you use a credit card, you are essentially borrowing money that must be repaid. But when you use a debit card, you essentially use money that is already in your own bank account.

Maximum Limit

Your usage is limited to the pre-set credit limit because credit cards have them. Debit cards, on the other hand, do not have any restrictions and your usage is only limited by the amount you have in your bank account.

Repayment

When using a credit card, you must pay back the borrowed money on time or before the due date. However, because debit cards use available funds, you are not required to make repayments in the traditional way.

Rewards

When you use credit cards to pay for purchases, you can receive amazing rewards, offers, and discounts. Although rewards are also offered by debit cards, the amount is clearly lower.

Impact on Credit Score

Debit cards have no effect on your credit score. On the other hand, the way you use credit cards could have a positive or negative impact on your score.

Blog Home | Visit Website | Credit Card Features & Benefits