Which is better- a debit card or a credit card?


Sometimes referred to as ‘check cards’, debit cards function very similarly to physical money. Once a debit card is swiped, money is automatically deducted from the individual’s checking account. Unlike credit cards, hardly any debit cards include provisions of reward points after a transaction is made. However, depending on the type of bank account held, account maintenance expenses are sometimes borne by the account holder.

To avoid the payment of such fees, some individuals opt to invest in debit cards that do not have any checking account allowances. Other expenses that could be incurred arise from overdraft fees and the usage of an out-of-network automated teller machine (ATM). The overdraft fee is normally collected to ensure that the individual’s minimum balance is not exploited.

Credit cards, on the other hand, work differently. After the formation of a revolving account with a financial institution, a line of credit is conceded to an individual. Money, up till this line of credit, can then be utilized via a plastic card so that the individual can complete their pertinent purchase. Due to safety reasons, most young adults nowadays tend to stay away from investments in credit cards after learning about credit card meaning. However, upon realization of the benefits derived from it, they are quickly gripped by the facilities this tiny card clasps.

Reward structures are different based on the sort of card acquired. Generally, there are three rewards an individual can attain — cash back, miles and points. Some cards also have additional rewards such as lounge access and fraud protection facilities. Despite one being drawn to the advantageous side of credit cards, they must not forget the charges that come along with it. Interest, late monthly payments, balance transfer and foreign transaction charges are the standard expenses a credit card holder will have to pay.

Differences between a credit card and a debit card

  1. Link

Credit cards are linked directly with the financial organization the card holder approaches for the creation of a bank account. Creation of this account induces the production of a bill every month. In contrast, debit cards are paired with the card holder’s bank account, and an account statement is generated every month and sent to the individual’s email address.

  1. Fraud Protection

In the case of any credit card fraud, $50 is the maximum liability one will have to incur in the United States of America. Banks differ on the extent of fraud protection they provide. Some ensure zero liability and even aid you with identity theft support and fraud protection for an entire day while locating your card, whereas others charge a small fee for their safeguarding services. Debit cards are normally associated with more stringent payment schemes in the case of fraudulent activity. Charges you will have to bear will usually augment the longer you wait to pinpoint your card’s location, and the fines can be quite hefty.

  1. Scores

The differences between a credit card and a debit card primarily stems from the credit score one must sustain. Inability to make payments in time will adversely affect one’s credit score, whereas debit card holders have no such commitments.

Credit card Types

Unlike the simple classification of debit cards into Visa and MasterCard, credit card types are a little more advanced. Before breaking down this categorization, it must also be iterated that RuPay debit cards also exist in India. Granted by the National Payments Corporation of India, these cards are a convenient alternative to Visa and MasterCard. Their inauguration was widely welcomed because of the reason behind their issuance — purveying rural villages in India with electronic access to banking facilities.

Secured credit card

One of the most important types of credit cards include the secured credit card. With a focus on the improvement of credit scores, these cards provide users with appealing interest rates with the supply of a cash deposit.

Reward credit card

The reward credit card has been around for decades and is eminent in its easy earning of bonus points which can be redeemed for long-term expenditures, or to lower your monthly bill.

Shopping credit card

Going by its name, the shopping credit card is looked into quite a bit by youngsters these days. This thrilling card provides consumers with captivating discounts and offers while shopping after a regular interval in time.

Travel credit card

One of the most common credit cards invested in by citizens in India is the travel credit card. Every purchase builds up reward points, which can be reclaimed for any vehicle discount. From the usage of air miles, to taxi and rail bookings, this type of credit card is the most embraced in India.

Fuel credit card

Finally, the fuel credit card aids in the drastic reduction in fuel prices with the redemption of reward points.

Forming an alliance with Bajaj Finserv Ltd., RBL Bank in India introduced the Bajaj Finserv RBL Bank SuperCard, which is more than what the ordinary credit card amounts to in terms of its features. This RBL Bank credit card guarantees to blow your mind with their absence of an interest charge for up to fifty days after the withdrawal of money from an ATM. Instead, only a flat processing fee of 2.5% is charged. A SuperCard owner enjoys various discounts offered at Bajaj Finserv partner stores, in addition to more than Rs. 55,000 saved annually. Catering to your financial situation, this Bajaj Finserv credit card lets you avail a personal loan against the credit card for ninety days, at a nominal interest rate of only 1.16% per month, and no card creation fee.