Debit cards allow you to spend money by drawing on funds you have deposited at the bank. Credit cards allow you to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.
When you use a debit card, the funds for the amount of your purchase are taken from your checking account in almost real time. When you use a credit card, the amount will be charged to your line of credit, meaning you will pay the bill at a later date, which also gives you more time to pay.
Is credit card safer than debit card?Purchases made using a credit card are safer as compared to debit card. This is because any fraudulent transaction made using your debit card leads to funds being deducted directly from your own bank account. Also, debit cards don't come with protection against fraud.
If you're paying for something online, you can typically use your debit card just like a credit card. You don't need to specify that you want to use a debit card (just select the "pay with credit card" option). Start by indicating the type of card you have—Visa or MasterCard, for example.
There are three types of credit card accounts: bank-issued credit cards (such as Visa and MasterCard), store/priority cards (such as the Bay and Sears) and travel/entertainment cards, also called charge cards (such as American Express or Diner's Club).
Types of Credit Cards.
- Rewards Credit Cards.
- Premium Rewards Cards.
- Credit Cards for Big Purchases or Transferring Debt.
- Credit Cards for Students, Bad Credit or Establishing Credit.
- Retail Credit Cards.
- Charge Cards.
- Business Credit Cards.
- Other Types of Cards.
'Debit'
is a formal bookkeeping and accounting term that comes from the Latin
word debere, which means "to owe". The debit falls on the positive side
of a balance sheet account, and on the negative side of a result item..
Many of us use credit cards irresponsibly and end up in debt. However, contrary to popular belief, if you can use the plastic responsibly, you're actually much better off paying with a credit card than with a debit card and keeping cash transactions to a minimum.
If you don't have enough funds in your account, the transaction will be declined. When you choose to run your debit card as credit, you sign your name for the transaction instead of entering your PIN.
Credit cards don't offer quite the same amount of flexibility. For example, you can't request cash back on a credit card purchase at the grocery store or the pharmacy. You can, however, get cash from your credit card at a bank teller or at an ATM. You'll just have to pay for the privilege.
Unsecured credit card
These cards are good for most consumers and can help build credit when used responsibly. Travel rewards and cash back cards are common examples of unsecured cards. A good starter unsecured credit card is the Capital One® Platinum Credit Card , which has no annual fee.
These cards are good for most consumers and can help build credit when used responsibly. Travel rewards and cash back cards are common examples of unsecured cards. A good starter unsecured credit card is the Capital One® Platinum Credit Card , which has no annual fee.
Disadvantages of using credit cards
- Established credit-worthiness needed before getting a credit card.
- Encouraging impulsive and unnecessary “wanted” purchases.
- High-interest rates if not paid in full by the due date.
- Annual fees for some credit cards – can become expensive over the years.
- Fee charged for late payments.
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