Credit Cards vs. Debit Cards: Key Differences

There are two financial instruments in the market that you can avail of and they are Credit Cards and Debit Cards. Both cards are used for making payments online and offline. Despite similarities, there are certain differences between the two. In this article, we have covered the key differences between credit cards and debit cards. Keep reading to kick start your research.

Credit Cards vs. Debit Cards: Key Differences

  • Credit cards let you borrow the funds from the card issuer while making the payments. Whereas in Debit cards you have to deposit the money to utilize it for making the payments.
  • Credit cards have a credit limit that is renewed after every billing cycle once you have cleared the due amount. Whereas, on debit cards, the limit is only the amount you deposit in the account that you can anytime increase by depositing more and you do not have to pay any bill on a debit card.
  • Credit Cards help you build a credit score but you cannot do so with a debit card.
  • On a credit card, you get to earn incentives on your purchases in the form of reward points, cashbacks, InterMiles, etc. On the other hand, you do not get these benefits on debit cards.
  • There is a high risk of falling into a debt trap with a credit card. But you will never have to face any debt trap risk with debit cards.
  • At the end of every month, you get a credit card statement of your outstanding balance on the credit card which you will be required to pay. But with the debit cards, you do not get a bill after every month.
  • You get to enjoy welcome benefits, travel benefits, entertainment benefits, shopping benefits, and much more with credit cards but you do not get all these benefits with debit cards.
  • There are membership fees and other hidden charges attached to a credit card but there are no such fees and charges attached to a debit card. However, for a better understanding on this aspect you are required to refer to the Most important terms and conditions of both credit cards and debit cards.

How can I avail of the credit cards and debit cards?

To avail of the credit cards, you can either apply online or you can also visit the nearest card issuer’s office to submit the credit card application manually. You would require to meet certain eligibility requirements such as minimum age, income proof, credit score, Indian residency, and any other required information. You are required to furnish all this information to the card issuer so that while scrutinizing your credit card application they can easily accept it.

When it comes to debit cards, you would have to go to the nearest bank branch to submit the application form manually. You will require to provide the age proof, address proof, and any other required information asked by the bank for the smooth review of your application. Once your application is approved you will receive the debit card. It is easier to get a debit card as compared to a credit card.

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