Credit Cards or Debit Cards
Credit Cards or Debit Cards

It is undeniably easy to pay money using cards. This saves you the hassle of taking cash and risk everywhere. There are two types of cards available, credit cards and debit cards, and you have to choose between the two depending on your requirements. 


Credit Cards vs Debit Cards

Given below is a comprehensive guide to help you choose a card depending on your spending habits and requirements.

Debit Card

A debit card is a payment card issued by the bank that allows you to make payments from your savings or current account by using a unique pin.

Pros of Using a Debit Card

· Prevents debt: With a limited pool of funds in your account, this card allows you to only make a purchase to the limit of your bank balance. So, these cards protect the user from getting into debt.

· Zero Annual Fee: Debit cards are highly inexpensive as you do not have to pay any annual fee for using them. You can use these cards at stores or ATMs without having to pay any fee.

· Suitable for small transactions: As the processing fee for debit cards is lower by comparison, these cards are highly convenient for merchants and, therefore, can facilitate smaller purchases very easily.

· Convenient to get: You can easily get a debit card from your bank if you have good credit and a well-maintained bank account. They come with no charge, and all you need to do is set the unique pin that will enable you to secure a purchase every time.

Cons of Using a Debit Card

· Limited funds: You do not have access to funds for paying beyond your bank balance limit. The card will not be functional once the funds run out.

Also Read: How to Check Your Credit Card Balance Online: Tips and Tricks

· Overdraft fees: If you sign up for overdraft protection on your debit card, then you will incur overdraft fees. The overdraft fees are higher when you are unable to control your spending limits.

· Not suitable for big purchases: If you want your bank balance on hand while getting some big purchases done, the debit card will not help you facilitate that. It will exhaust all the money in your savings account for the purchase, and therefore, these cards are not suitable for big purchases. 

Credit Card

Credit cards are cards issued by banks to purchase stuff on credit. These plastic or metal cards allow you to make a purchase on credit, for which interest is charged till you pay the full amount.

Pros of Using a Credit Card

· More secure: You have a specified period between your purchase and payment. You can use this time to keep your current account in check and make sure that you have enough money when the date is due.

· Great for credit establishing: If you want to improve your credit card without cibil score you can do that. It is a statement of your financial discipline, and the quicker you pay it, the better it gets for you.

· Rewards and cashback: Credit card reward points and cashback offers in various stores are one major reason people are turning to use them excessively. These rewards and cashback can get you a discounted rate for many services.

· High-limit cards: You can set a high payment limit on these cards, and you can spend up to that much in purchases.

Cons of Using a Credit Card

· Damage your credit score: If you are not timely in paying your credit card bills and other statements, this will directly reflect in your CIBIL score negatively.

· Overspending: Because you have a safety net of time for paying for your purchases, it may happen that you end up overspending on things you don’t require.

· Debt: When you have increased your spending incessantly, and you default in paying the principal amount and interest, there is a high possibility that you end up in debt because of it.

Also Read: Why You May Prefer a Credit Card Over a Debit Card


Now that you understand the difference between credit card and debit card, depending on your needs and requirements, you can choose the one that helps you move further toward building wealth rather than going into debt.

Check the pros and cons diligently and make your research go deeper beyond debit card budgeting and credit card rewards, and choose the card that gives you an optimum advantage.


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