The era of cash seems increasingly distant with the emergence of new payment alternatives and online banking. The user can enjoy more and more possibilities that are within his reach to guarantee his comfort and cash seems not to cover all his needs. Internet payments, security and the management of our savings offered by online banking apps mean that cash is no longer a rival for these emerging products.
Instant money transfers, cryptocurrency and online banking are just some of the financial concepts that are increasingly on the lips of all users. But today we do not want to go that far, we will talk about a more mature concept in the market, the Credit and debit cards. They are the same? What particularities differentiate one from the other? Which is the one that best suits your needs?
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Differences between credit and debit card
The Credit and debit cards they are not the same. Generally, both allow us to make purchases both in physical establishments and online without the need for cash, what differs is the nature of the money on the card.
In the debit cards the user has the balance found in the account associated with the card. When withdrawing money or paying, it will be automatically deducted from your account, just like any other movement. Once this balance is exhausted, you will not be able to continue making your purchases. If the balance is insufficient for the payment, you will not be able to carry out the transaction either.
The Credit cards, on the other hand, allow purchases to be made regardless of the user's account balance. It is the bank, the financial institution, who lends the money to carry out the transaction. The borrowed money has a limit and the user will return this money the following month or in several installments paying interest. It is therefore important that it be solvent, which is why the bank studies the feasibility before granting a credit card.
How can you pay a credit card?
By using a credit card it is the financial entity that lends money to the user. Therefore, he must return it the following month. There are several ways to make this payment.
- At the end of the month. One of the possibilities that the user has is to return the credit spent this month one day of the following month. This is usually a fixed day, the same every month.
- Percentage. In the return by percentage, the user will pay each month a stipulated percentage of the balance to be returned.
- Fixed fee. In this payment method, the user must pay a fixed fee, the same each time to be able to cover the payment of the card.
Commissions and interest on credit and debit cards
It is important that the user knows the limitations of each type of card, the opportunities and cons that each one has. The Credit and debit cards They are also different if you take into account the commissions or interest that they may entail, especially when carrying out certain operations.
Usually cards, whether credit or debit will involve the payment of an annual maintenance fee, as well as the registration fee. The price of this will depend entirely on the card you choose and the bank with which it is associated. There are also free virtual cards, with no registration fee, maintenance or conditions. From FazilBy the way, we invite you to try our totally free virtual debit card and wallet account.
Another point to take into account when opting for one card or another is the interest on cash withdrawals. If the client decides to go to an ATM of his financial institution with a Debit Normally, no commissions are charged. The money will be withdrawn from your account and given to you in cash. The credit cardHowever, it usually charges very high interest if it is used for this same action.
A card for every situation
The Credit and debit cards they are different beyond their structural purpose. Each one has some characteristics, some pros and cons and the optimal thing for the user is to know in which situation it is convenient for him to use one or the other. Below we explain which card is most appropriate for each operation.
- Withdrawals. As we have already clarified, it is preferable to withdraw money with a debit card since this will not produce commissions in the entities belonging to the user's bank, unlike the credit card.
- Uncontrolled spending. Given the possibility of excessive spending, it is better to opt for the debit card, since once the account balance is used up, it will not allow the user to continue making purchases. The credit card will allow you to continue making purchases even with a negative balance so that the user has to return that money the following month.
- Physical purchases. At this point there is not much difference between debit and credit. Although some credit cards offer discounts in some establishments and even finance purchases. The optimal thing is that the user knows what benefits each bank offers when contracting each card.
- Security. Most credit and debit cards have anti-fraud insurance, which will protect the user's money against any mishap, offering greater security. This insurance also covers accidental damage derived from the goods that the user buys. Therefore, it also makes it one of the best options for making purchases online.
Therefore, the differences between credit and debit cards there are several. The best thing is that each user takes into account their needs and the actions for which they need the card and based on that make a decision. From Fazil We hope we have resolved your doubts about these two payment options and we invite you to try our debit card without commissions or conditions, totally free.
We also invite you to read more about the free virtual cards that exist on the market.