Explain The Difference Between A Credit Card And A Debit Card:- Understanding banking terminology has always been a difficult task for the common man. There are many terms which we use in everyday life but do not know their exact meaning. Such as savings account and current account and similar debit cards and credit cards. Actually, most people make the mistake of thinking of these two as the same product because both have several similarities in introduction and way of working, but from the point of view of the world of finance, there is a difference between the two.
Explain The Difference Between A Credit Card And A Debit Card.
By knowing the difference between these two, you can make a lot of development in your financial world and your money management will also be more helpful. Also, you will be capable to make some savings. Before knowing the difference between these two, let us know what are the similarities between these two?
What Are The Similarities Between Debit And Credit Cards?
- Both are plastic cards of the same size and color with lots of numbers written on them.
- Both are accepted at all payment locations and the usage method for both is almost the same.
- You get the assistance of both through one or the other banking medium and the organizations making these cards manufacture both varieties of cards, so the symbols recorded on them are also more or less the same.
- The most important thing is that both of them offer our financial transactions easily.
- After knowing the similarities, now we try to understand both in turn so that we can easily understand the difference.
What Are Debit Cards?
Debit cards are similar to credit cards in terms of convenience, but they differ because of the source of their money. Through a debit card, you withdraw money from your savings or current account, this means that as much money is debited from your account as you have done through the card. In this arrangement, the query is generated from the account of the money you pay and reaches your bank. In such a situation, the bank deducts the amount you have paid from your debit card and credits it to the merchant’s account. If it happens that you do not have the amount in your account as you have paid through a debit card, then the bank declares your query and sends a message to the merchant that there is not enough amount in your account and your transaction is not completed Is.
What Are Credit Cards?
Credit cards were born on the basis of the idea that if a person wants to borrow a very small amount, then how can the bank make it available to him without much paperwork and the borrower does not even have to go to the bank. Credit cards were born to provide this facility to their customers. Where you withdraw the amount from your account through debit cards, while through credit cards, the bank lends you the amount for some time as you have paid through your credit card. The limit of the amount to be paid from the credit card is decided by the bank according to your financial base and it can be anything starting from 5 thousand. You also have to spend fixed interest on this price.
Explain The Difference Between A Credit Card And A Debit Card.
- With a debit card, you withdraw money from your account, while through a credit card, you borrow that amount from the bank.
- You do not have to pay any interest on the amount withdrawn from the debit card and interest has to be paid on the amount withdrawn from the credit card.
- Debit card online transaction limit is the amount available in your account whereas credit card limit is decided by your service provider bank.
- Credit cards are used uniformly around the world so they are more useful while traveling, whereas debit cards are accepted only in your country.
- The service charge levied by the bank on a debit card is generally less than that of a credit card.
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Precautions To Be Used While Handling Credit And Debit Cards.
Nowadays the incidents of online fraud and card cloning have become common, due to which there is always fear in the minds of people using credit and debit cards. If you take the following precautions while using your card, then there is every chance of avoiding such fraud-
- Do not reveal the series of numbers on your card to anyone and try not to lose sight of it during use.
- Do not share the password of your card with anyone even by forgetting it, it is completely confidential and no bank asks its customer for his password in any way.
- Do not use sites that do not start with HTTPS but start with HTTP.
- Never store your card online on any site because if your login is caught by the hacker then the credentials of your card will also be in his hands.
- Keep changing the password of your cards at regular intervals, in this case, the chances of online fraud are reduced.
- After swapping your card and entering the password at any store, do not forget to collect the receipt after the transaction is completed.
- Avoid using the card at unmanaged ATM machines or ATM machines that are located in a secluded place. Hackers use such ATM machines to clone the card.
- If you take these precautions, you will be able to enjoy your cashless transactions for a long time without any loss.
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