Debit card or credit card, which is your choice? Both types of cards have their advantages and disadvantages. It is important for you to consider using the card according to your needs.
Physically, credit cards and debit cards usually look pretty much the same. Generally consists of a 16-digit card number, expiration date, and a personal identification number (PIN) code. The main difference between these two types of cards lies in the owner of the funds.
The funds on the debit card are your own, while the funds on the credit card are lent by the bank. With a debit card, you can spend or withdraw funds from your account. While credit cards allow you to use borrowed funds from banks.
Credit cards impose a requirement that the cardholder repay the money borrowed, plus any applicable interest, as well as any agreed surcharges, either in full on the billing date or over time. Confused about choosing a debit or credit card? let’s know the difference!
Read also: Benefits of Debit Card
A debit card is a card that you can use to make purchases or withdraw money from your own account, not through a loan from a bank. Debit cards are the right choice for those of you who want to save money. Yes, you don’t have to worry about debt like what happens on a credit card.
If you shop with a debit card, it will only withdraw money in your own account. By using a debit card, you can avoid the temptation of credit and still save money. Of course, this can help you avoid high-interest debt.
In addition, there is no charge for withdrawing cash using your debit card at your bank’s ATM. Unlike credit, credit cards usually charge cash withdrawal fees plus interest.
A credit card is a card issued by a bank. With a credit card, you can borrow funds for various purposes such as shopping, paying bills, to withdrawing money.
The advantage of using a credit card is that you can shop without worrying about not having enough money in your bank account. But the disadvantages of using a credit card are in debt, the impact of credit scores and interest costs.
When you make a purchase with a credit card, you are spending the bank’s money, not your own. This money you have to pay back with interest. At the very least, you are required to make bill payments on your credit card every month.
Paying your bills on time and keeping credit card balances low can help keep your credit score good. However, misuse of credit cards can damage your credit history if you are frequently late in paying bills.
Since credit cards are short-term loans, you have to pay back what you spend with interest. Credit card interest rates at each bank are different.
Choosing a debit card or credit card can be a difficult choice. You may be able to have both but pay attention to which card you need the most. Remember, what you need may be more important than what you want.