Difference between Debit & Credit Card
There are critical contrasts between debit cards and credit cards. A platinum card can be benefited by any person who has a current or investment account in his/her name and have stored an aggregate of cash in it. A check cardholder can utilize his/her card to make buys, gave he/she has reserves accessible in the record. A charge card is offered by loan specialists to the individuals who satisfy different qualification criteria. For individuals who apply for a charge card, a different Mastercard account is opened in which as far as possible determined by the moneylender is accessible. This credit can be utilized by the borrower as a fleeting advance and must be reimbursed by the due date. An intrigue will be imposed on the remarkable sum on the charge card.
Various other differences between a debit card and credit card are highlighted below:
| Debit Card | Credit Card |
| Only the funds available in the current/savings account can be used to make transactions. | Credit available in the credit card account can be used to make transactions. |
| The availability of funds is based on the investment made to the account. | The availability of funds is based on the credit limit set by the lender. |
| Interest is earned on the deposit available. | Interest is levied on the outstanding balance. |
| EMI facility is not available on debit cards. | EMI facility is available on credit cards. |
| No repayment required. | Repayment of outstanding amount can be made either as revolving credit (payment of minimum due amount on the credit card account or payment of more than minimum due on the card and less than total outstanding amount) or the borrower can choose to pay the total outstanding amount by the due date. |
| Charges include joining fee, processing fee, annual fee, etc. | Charges include joining fee, processing fee, annual fee, late payment fee, prepayment penalty/ foreclosure charges. |
| Monthly bank statement is sent to the borrowers. | Monthly credit statement is sent to the borrowers with details of bills, transactions, total credit outstanding, minimum amount due and due date of payment. |
| Any savings/current account holder can avail a debit card. | In order to avail a credit card, the applicant must fulfill the lender’s eligibility criteria. Factors such as the CIBIL score or credit history, existing relationship or transaction history with the bank, debt-to-income ratio, etc. affect the individual’s credit card eligibility and approval. |
| Fraud liability offered by the Bank/ financial institution is low in the case of a debit card. | Unlike a debit card, credit cards come with high fraud liability and insurance cover for losses incurred from the theft and misuse of a credit card. |
| The transactions made on a debit card does not affect an individual’s credit history. | Transactions made on the credit card is reflected on an individual’s credit history and is reflected in his/her CIBIL score. |
| Overdraft facility is limited in the case of a debit card. | Overdraft facility is available on credit cards. However, an overlimit fee is chargeable on the same. |
Differences between ATM card, credit card and debit card
While all three are plastic forms of currency, there are quite a few differences between ATM cards, credit cards and debit cards. Given below are the major differences between the three:
ATM cards can be used at ATM’s only
While this might seem obvious, the statement is quite a significant one. ATM cards have one purpose, and one purpose only – to enable you to withdraw cash from an ATM. They cannot be used to pay for groceries or a bill at a restaurant, for example, as they can only be read by an ATM machine, which in turn dispense cash from your savings or current account.
Debit cards can be used anywhere, but require access to real-time funds
In case you’re searching for a card that can be utilized for exchanges and also to pull back money, at that point a platinum card is the one for you. Charge cards can be utilized at ATM machines to pull back assets that are as of now accessible to you. As it were, previously the withdrawal is finished, the cash will be charged from your investment funds/current record continuously. The same goes for buys influenced utilizing your charge to the debit card at eateries, shopping centers, silver screens, and so forth.
In the event that you don’t have adequate subsidizes in your record at the season of making a buy utilizing your plastic, the exchange would experience if your card is connected to an overdraft account (which would allow you to pull back a set entirety that is well beyond the sum you really have in your financial balance). In the event that you have not connected your card, the exchange would not experience and the card will be declined.
Some platinum cards could likewise qualifies you for cashback, or an arrival of a segment of the sum you spent on your card. This office relies upon the kind of check card you have and on different factors, for example, the sort of exchange and the place the exchange is being made.
Credit cards can be used anywhere and function like mini-loans
A Visa is, in every way that really matters, a credit that the bank gives you at the season of making a buy. Charge cards are not straightforwardly connected to your investment funds or current record, which means there is no constant derivation of cash each time you make a buy utilizing your Mastercard.
You should influence a regularly scheduled installment toward the finish of your credit to card charging cycle, where you will be required to make an installment towards your extraordinary sum.
You can decide to either pay off the entire sum or pay just a small amount of the cost, known as the base sum due. The adjust sum, assuming any, draws in intrigue, which will collect until the point when the whole sum has been paid off.
Applying for a Mastercard influences your FICO assessment, which is the premise of your financial soundness. Money related organizations take a gander at your financial assessment before favoring an advance or a Mastercard, as the score is utilized to judge regardless of whether you will have the capacity to reimburse the advance or remarkable sum on your charge card.
Charge cards likewise accompany progressively extra advantages as service contracts or extraordinary offers, for example, money back, preferred customer credits, and so forth. Along these lines, picking the correct Mastercard to suit your requirements would bring about you having the capacity to raise your credit value through educated spending, making it less demanding for a future Mastercard application or advance application to be acknowledged.
These are a portion of the contrasts between an ATM card, charge card and Mastercard. There are numerous banks in India that offer these cards and individuals are encouraged to explore before they apply.
