Cash transactions are gradually diminishing, especially with the government’s digital push. Debit cards and credit cards are thus increasingly becoming a preferred mode of payment. While both allow cashless payment, one can identify specific differences between debit and credit cards. The major differences are –
- Building a credit history
Using a credit card helps to build the credit history of an individual. Payment of bills ahead of the due date reflects favorably on the credit history enabling to secure credit on better conditions. Financial institutions will consider such a credit card user as financially responsible. Such an impact does not ensue with debit card usage.
- Protection against fraud
Also, if the credit card is stolen or fraudulently used, the user can report such an incident before the bill due to date and expect immediate action. The liability for money used fraudulently depends on the card issuer. In the case of a debit card, the liability completely lies with the cardholder.
- Security features
In the case of dubious transactions with debit cards, the money is already taken out from the cardholder’s account. However, credit cards retain additional security features that allow an individual to track fraudulent transactions on a real-time basis and report the same immediately.
These are a few among the various benefits of a credit card over a debit card. If you consider applying for a credit card, payment instruments like the Bajaj Finserv RBL Bank SuperCard can be considered due to their range of benefits, from providing easy loans to cash withdrawal from ATMs against a nominal charge.
The factors mentioned above establish the difference between credit and debit card. However, before considering opting for a credit card, one should undertake a detailed assessment of his/her finances as per the expenditure requirements and repayment capacity. It should also be kept in mind that the credit limit is not to be entirely exhausted, which can affect one’s credit score adversely.
