Is banking terminology a mystery to you? You don’t know what is the difference between a credit and debit card? Are you wondering what the debit card is all about? Are you looking for simple, clear definitions of these two terms? In that case, that’s the topic for today!
What’s the difference between a credit card and a debit card?
There are several types of payment cards on the market, including, but not limited to, a debit card and the aforementioned credit card. Are there any differences between them? Credit and debit card – what is worth remembering? Let’s start by explaining both terms to each other.
How does the debit card work?
The debit card is correlated with the bank account we have. With the help of a debit card, we can carry out transactions that are covered by the money that we have at our disposal in the given account. How does this work in practice? With a debit card we will pay in the store, get money from an ATM etc. In some cases, a debit card can make payments via the Internet. In banks’ offers we can find cards of various institutions, for example the Visa Debit card.
Now let’s get to the second case under consideration
What does a credit card consist of? What are the conditions of its use and the main features of the credit card? The credit card allows the owner to use the so-called “credit limit”. This is a certain amount of money. How high the credit limit the bank decides to make available to us depends on several factors, among others: our creditworthiness, repayment history of earlier obligations, etc. However, it should be remembered that we borrow money using a credit card, therefore the debt must be regulated according to specific rules . The credit card is also inextricably linked to interest. There are various credit cards on the market, including Visa or MasterCard.
SUMMARY: debit card and credit card – the differences are colossal! First of all, you have to realize that these are two completely different payment cards. If we have our own bank account, most likely we are users of a debit card, while in the case of a credit card we have to decide for ourselves whether this solution will prove appropriate in our case.