Credit card and debit card. They sound similar, but they are different. Although both of them offer convenience, security and seamless payment activities, they have significant differences from each other.
In this blog, we are going to explain about credit card v/s debit card. So, keep reading to know which one is right for you.
What is a Credit Card and a Debit Card?
A credit card is a financial tool that lets you borrow money from a bank to buy things now and pay later. You can use it for online purchases, bill payments, or shopping. The money which you borrowed while making payments will be summed up. If the total amount is not paid back each month, you have to pay the borrowed amount over time, along with interest.
A debit card is a financial tool directly linked to your bank account, which allows you to use the money in your account. As soon as you spend money using this card, the spent amount will be immediately deducted from your bank account.
Credit Cards V/S Debit Cards in Detail
- Spending Limits
- Credit Card: Provides a predetermined credit limit. Within this limit, you can spend more than your existing bank amount.
- Debit Card: Spending is limited to your available balance.
- Payment Flexibility:
- Credit Card: You can pay later, either on a full or installment basis.
- Debit Card: Your account will be immediately deducted just after payment.
- Interest and Fees:
- Credit Card: If the total amount is not paid back each month, you have to pay the borrowed amount over time, along with interest.
- Debit Card: No interest charges or any repayment deadlines as you use your own funds.
- Credit Score Impact:
- Credit Card: It affects your credit score based on your usage and repayment period.
- Debit Card: It doesn’t involve borrowing, so it does not impact your credit score.
- Security and Fraud Protection:
- Credit Card: Provides better fraud prevention and often limits liability for unauthorized charges.
- Debit Card: Offers basic fraud protection. However, the recovery of disputed funds might take longer.
When to Choose Credit Card/ Debit Card?
You should choose a credit card if you want:
- Emergency Funds: Provides a safety net for unexpected expenditures.
- Interest-Free Period: To avoid paying interest, make your payment during the grace period.
- Building Credit History: Raise your credit card score by making responsible use of your credit card.
You should choose a debit card if you want:
- Direct Access to Funds: You get direct access to your fund.
- Daily Transaction: It is most applicable if you do daily transactions multiple times.
- Budget Management: You only spend the amount in your account.
Also, you can choose to get both a credit card and a debit card, there are no set restrictions on getting both.
Why Choose Global IME Bank for Your Cards?
- Wide Acceptance: Both Debit and Credit card are acceptable widely, in Nepal, India and Bhutan.
- Secure Transactions: Get safe and secure transaction
- Convenient Application: Easy application and quick approval.
Conclusion
People often get confused between credit card and debit card and which card to get. We hope this blog helped you with clearing any confusion regarding it. Whether you need a credit card or debit card to manage your funds, Global IME Bank provides the best and reliable credit card and debit card for you.
