Debit Card vs Credit Card, Which one is good for you?

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Every other day we get some random call from Credit card company but what is this credit card? And the other card that you right now have with you is probably the Debit card. But what is this debit card? Or the right question is what is the difference between debit card and credit card? Don’t worry, we got you covered here with Debit Card vs Credit Card.

If you want to know Debit card vs Credit card meaning and difference stay tuned with us in this post and you will be able to know what you want to know. This is very useful if you are about to apply for a Credit card. As knowledge about what are you going to purchase and what are the charges, you have to pay on Debit card vs Credit card side by side.

What is Debit card?

If you have this question then there is another question for you from our side. Which card do you have right now in your pocket? If you ever opened a bank account and opted for a card then you have the Debit Card with you. Now, you must be wondering that is ATM Card. Yes! you are right that card is called ATM Card but every ATM Card is a debit card. Surprised! If you didn’t know this before then update your knowledge on this date almost every ATM card is a debit card.

The Debit card is a card that requires pre-payment to be made before using the card in order to make payments. It is a form of plastic money and can be used while shopping online or online in payment gateways.

Your ATM card is actually your debit card too. How? Every card information like Cardholder Name, Expiration Date and CVV printed on it and it is connected to your bank account. So when you pay someone using that card automatically the amount paid is debited from your account and credited to payees account. The payee is the person to whom the amount is to be received. Amount debited means reducing the balance and credited means increasing the account balance.

What is an ATM Card?

Whenever you open a Bank account in any Bank, you get an option to opt for ATM card. This ATM card lets you withdraw money from your account anytime from anywhere. Some people call ATM as Any Time Money but no ATM stands for Automated Teller Machine. This machine lets you withdraw money from your account up to certain limit say Rs 50000 per day from Saving Account. This is a general limit. Some cards have the limit of Rs 20000 and some even of Rs 1 lakh. This depends on your bank and type of account. But the question is how does ATM Machine recognize it’s you withdrawing money?

How ATM Machine recognize you?

The fact is ATM Machine does not recognize you but it recognizes your card. But how? So your ATM Card has a magnetic chip in it and ATM Machine reads that chip which holds your data like your name account number etc. With that information, machine fetches your account information like your account balance and bank statement. Ten it performs on your instructions after validating you. How does it validate you?

So you get a PIN along with your ATM Card. Nowadays you don’t get a PIN but you can choose your PIN when you insert your card for the first time. Since you have a PIN that you and only you know so the machine can easily verify you. Once you insert your ATM Card and then after enter your PIN correctly, machine verifies you.

Now you must be clear with the fact that every ATM card is a Debit Card. Debit cards are the cards that basically debit your account when you make any payment. So your ATM card acts as ATM card when you withdraw cash but it becomes Debit card when you make payments. You can make payments with swiping machines placed in stores, and online too. While making payments online make sure that you have OTP Verification enabled.

What is OTP Verification?

OTP is One Time Password meaning it can be used only once. If you have OTP enabled in your Debit Card/ATM card, it will send an OTP to your phone number when you make payment. After you enter your card details then it will send an OTP to your Registered Mobile Number and you have to verify entering that One Time Password. If it is correct your payment will be done. This is very helpful in case you lost your card or card details. In any case, if someone tries to use your card you will get the OTP and can block your card immediately. This OTP is also a point in Debit card vs Credit card difference.

OTP is useful when you want to change the PIN of your ATM card.

What is a credit card?

The credit card is a much-used term nowadays because everyone wants a Credit Card. But do you know what is this Credit Card? In simple terms, the credit card is reverse of the Debit Card. The debit card uses balance available in your account while the credit card does not require any account balance. With the credit card, you can first make payments while shopping and spending then afterward you have to pay credit card bill within a stipulated period of time. Generally, this stipulated period of time is 50-60 days. If you don’t pay them within this time they charge a very high rate of interest which may go even up to 48% per annum. You will know more about credit card when you go further in Debit card vs Credit card section.

How to Get a Credit Card?

In order to get this Credit Card, you have to fulfill certain conditions like you need a minimum balanced in your account and some security in case you don’t pay back your amount due. Most of the time Credit Card companies contact you themselves if you have good account standing. They will attract you with a lot of offers and schemes but they are just tactics to attract a customer.

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But if you are interested in getting a Credit Card by yourself follow these steps:

  • You can go to the Bank where you have a Bank account and ask them about Credit Card.
  • Almost every bank provides Credit Card facility now.
  • You can go to Bank Websites to apply for Credit cards Online

Is Credit Card really beneficial?

firstly credit card is loan money that you have to pay back. So, keep it clear in your mind that you are taking a loan in the form of Credit Card. And the problem is that you don’t even realize that you are taking a loan while spending. You feel like you have abundant money and you keep spending on unwanted things. And, at the end of the month, all your salary goes in Credit card bill payment. To choose among Debit card vs Credit card, choosing a Debit card is a wise decision.

So it is a subjective question whether the credit card is beneficial or not depending upon situations. Because if you are in urgent need of money, the credit card stands out to be very helpful. And on the other hand, it also develops the habit of overspending. So, only you can decide whether it is beneficial for you or not?

Debit Card vs Credit Card

There are a few Debit card vs Credit card difference points that indicate a clear difference between these two:

  • The debit card is a type of own funds meaning it is your own money. On the other hand Credit Card is a type of borrowed money that means you are borrowing the money from Credit card company.
  • If you use a credit card you have to pay its bill within a stipulated period of time while there is no such requirement in case of the debit card.
  • Debit card vs Credit card includes a point that you have to pay a high rate of interest on credit cards while debit card being your own money you don’t need to pay any single penny.
  • A major point of difference in the Debit card vs credit card is that Rupay debit cards(Debit cards from Indian Company) are not accepted in International payments. But Credit cards are universally accepted.
  • Also, in terms of security in Debit card vs Credit card, debit cards are more secure as it sends OTP to your Registered Mobile number.
  • If you use a Credit Card you get better offers while shopping online. This is because most of the e-commerce sites have partnerships with credit card companies.
  • Also, a point in Debit card vs Credit card difference is that credit Card requires some processing fee and an annual charge to be deducted from your account. While the Debit cards generally charge a nominal fee on a monthly or annual basis and that is for ATM services. Even some banks do not charge any amount.

So, now it must be clear among Debit card vs Credit card discussion that which one is good for you. But, which one is good for you?

Which one is good for you?

If you take our suggestion in Debit Card vs Credit card, a debit card is all you need. But if you need funds to be precise loan funds, you can opt for a credit card. Both Debit card and a Credit card are useful in their own terms. it depends on person to person and for what person you need the card. So only you have to decide which one is beneficial for you. But our clear suggestion is having a Debit card over a credit card when it comes to debit card vs credit card.

Generally, cards are issued by:


So, the clear point in “Debit card vs Credit card” is that Debit card is more beneficial over credit card if you want to make saving your money. Because the debit card is your own money that you have already deposited in your bank account. While Credit Card is a loan fund on which you have to pay interest after usage. Both the cards are considered as plastic money and have similar functionality except some differences.

After this discussion on Debit card vs credit card, which one will you prefer?

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