There are many ways to carry out a transaction. One of the common ways of exchange for carrying out a transaction is through cash. Alternatively, debit and credit card is also used regularly as payment modes. The former was introduced in India in the 2000s, using which you can send money digitally. As for credit cards, they work differently.
What is a credit card?
Credit cards, unlike debit cards, are not linked to a bank account and are known for offering rewards for every transaction. The rewards offered by the cards might come in different forms, such as reward points and cashback. You can apply for a card offline or online to enjoy these facilities.
However, it is essential to remember two things. Firstly, you need to check your eligibility for credit cards. Your income and repayment history is considered by credit card issuers when sanctioning new credit cards. Secondly, you should also note that different types of credit cards are available in India. Hence, before sending a credit card application, choose the one that suits your requirements.
How is a credit card different from a debit card?
Here are some key differences between credit cards and debit cards:
One of the significant ways that credit cards are different from debit cards is that credit cards come with credit limits. The credit limit depends on the type of card you own, your income, and your creditworthiness. On the other hand, it is possible to use debit cards only up to the amount in your bank account.
2 ATM withdrawals
Debit cards usually do not charge a cash withdrawal fee. You can make a specific number of ATM withdrawals per month from any bank’s ATM. Meanwhile, cash withdrawals done using a credit card might end up attracting a withdrawal fee and interest. But note that credit and debit cards come with a daily cash withdrawal limit.
With debit cards, the amount is directly debited from your account. Therefore, debit cards don’t charge interest. However, credit cards charge interest when converting transactions into EMIs or delaying payments. To avoid the credit card interest rate, you must pay your outstanding bill before the due date.
Credit cards offer more benefits than debit cards, such as discounts, access to lounges, and cashback. Moreover, some banks also provide rewards for referring credit cards to an acquaintance.
There are several other ways in which credit and debit cards are different from each other. Credit cards also come with the capacity to help you to build a credit score. Apart from that, credit cards also offer more benefits than debit cards. To enjoy the benefits, you can apply for a credit card online.