The difference between Debit and Credit Cards

Debit cards are used to pay for goods and to withdraw money from cash machines where the money is automatically deducted from your bank account. They provide the cardholder with electronic access to their bank accounts allowing them to embrace cashless shopping and withdraw money anywhere anytime.

Debit cards have some advantages over credit cards. They prevent the holder from unnecessary spending. Having saved a certain amount of money, one can make informed choices of what to buy and what not to. Only buy what is important at the moment and follow your budget strictly. It is safe to carry a debit card without fear of getting robbed and losing your money. Every card has a secret PIN and no one else can have access to your account without it. You can also withdraw your money from any ATM which supports VISA & MasterCard worldwide.

Credit cards are issued to users as a method of payment where they can buy goods and services and pay at a later agreed date. The bank which is the card issuer gives the card holder a line of credit with an option of borrowing money or cash advance. A credit card is not linked to your bank account but just a credit facility. Card holders make purchases and decide whether to pay monthly or weekly with some interest. Little interest is paid when the credit is settled faster.

Credit cards can help you save money. It means that you can still do shopping with your card and save your cash. This is important where you have a lot of spending and need to have cash at hand. You will still accomplish your budget even when broke. Credit cards also help in tracking your credit history. You will have an insight of much you spend in a month or year and can be useful in budgeting.

Angela Scott-Briggs: Editor, | Interested in Innovations in Business, Finance, and Technology .
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