Advantages of Debit Cards Versus those Offered by Credit Cards

Debit cards allow users to spend money that they have, by drawing on funds that they have deposited with the card provider.

Credit cards allow consumers to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash. Essentially, when you use a credit card, the issuer pays the merchant and you go into debt to the card issuer.

Advantages offered by Debit cards:

They can be used to conveniently withdraw cash from ATMs

Withdrawing cash is simple and can be done at any ATM or even at certain supermarket ill points.

Money is deducted immediately from your account

So you won’t owe anyone money after making a purchase using your debit card. This is one of the main advantages of debit cards versus those offered by credit cards. No interest is charged because no money is borrowed.

There is an easy application process

Qualifying for a debit card is fairly easy.

The card is secured by a PIN

Using a debit card is safe, as long as you have your PIN safe.

No effect on your credit rating

Applying for or using one doesn’t affect your credit history in any way.

Advantages offered by Credit cards:

Credit cards offer an option to borrow funds in an emergency

Having a credit card can come in handy in the event of an emergency. It can provide access to large amounts of cash when you need it most.

Interest-free periods offered

You can pay the amount back in full at zero interest. If you don’t do it after a set period of time, you will be charged interest.

Personalised credit limits

Credit limits are based on your individual creditworthiness.

Improved credit record

Responsible use of a credit card and payment can improve your credit rating

Both card types offer an easy way to access money without having to carry cash around. Making a comparison of the advantages of debit cards versus those offered by credit cards may be worthwhile when trying to make a choice between the two.