The Government has released advertisements to educate people on how to go cashless. In the wake of the hour, where there is limited cash flow in the system, using cards does seem like an easy option.
As the nation gears up to new ways of spending, we take you through the basics of usage of credit and debit cards.
They both are plastic cards, but very different in nature:
Debit cards allow bank customers to spend money directly from the account to which their card is attached.
Credit cards allow the consumer to borrow money from the issuer with each swipe. This amount has to be paid off by the user by a certain date.
Account Statement
In case of debit card, the user has to rely on his or her bank statement to know the total spends. Basically, it is accounted as a banking transaction, and the same is recorded in the debit-credit account statement from the bank.
For credit cards, one gets a monthly statement, which also serves a bill. This statement records all spends in the month, and has details about the due date to pay off the bill or statement balance.
Collaborations, Reward Points and Cash Backs
In case of debit cards, the issuing bank may give rewards points for swiping the cards. Or, the banks may incentive give its customers to use the cards at certain vendors, with whom they collaborate to pass on certain benefits to the customers.
There are multiple options issued by the bank in case of credit cards. In most cases, there are co-branded cards that offer double the benefit. These options define the nature of the cards and its subsequent reward points or cash back offers. Thus, it can be extended as a line of credit to its users in the form of rewards cards, mileage cards, petro charge cards and so on. One can even avail special discounts while spending with special co-branded cards.
5) Lounge Facilities.
Credit scores
Debit Cards is like spending cash on the go. It is seen as part of a bank transaction, and doesn’t really contribute to building one’s credit score.
Usage of credit card use is reflected on the customer’s credit report. This comes handy, when a bank or lender has to check someone’s credit history while approving loans.
Safeguard and protection
Debit Cards don’t usually give additional benefits like insurance cover. Further, in case of loss of a debit card, one isn’t guaranteed high protection. In fact, the new card is issued almost instantly in the form of express service.
Credit cards usually offer additional warranties or insurance for items purchased. On the personal front, too, credit cards offer more protection in case of loss of card. And, to replace the lost card, one has to resubmit the documents to safeguard one’s personal interest.
Both, cards of course come with certain advantages and disadvantages. If you would like to more such differences, and which type of card is more beneficial for you, then call our helpline numbers or leave your details below and our executives will get back to you at the earliest.
