Debit And Credit Cards: Differences And Similarities

Mostly peoples know the same definition of debit cards and credit cards and they use them in same manner. But there are a lot of differences in both types of cards. It is true, that they are easy facilities to provide money in emergency or our convenience but their working methodology is quite different from each-other, which makes differences in them.

Generally, credit card is a system of payment through or on the basis of credit rating, which assures a seller that the card user has enough satisfactory credits in his account and he will receive his payment through the credit card provider company. A credit card can be used to buy a product or to pay money. On another side a debit card is associated with bank account and allows the user to withdraw money or to pay the cost of purchased goods or services. It works through bank accounts and available funds with it and don’t provide any credit limit to a user.

As we know, both devices are use to money exchanging from one account to another account. Both are secures for sellers and merchants as they are assured to get money from card user. Both enables you to draw or pay money for a product or service or personal needs. Then where is the difference in a credit card and debit card? Primary difference between both is the Transaction procedure is the primary factor which differentiates both in two categories. When we use bank card as a debit card, we are given a personal identity number (PIN) which we have to use at transaction to transfer the fund into another account of a merchant or individual. When you are using a credit card you have to verify by your signature to transfer the money. There are some more differences in credit cards and debit cards as below:

Credit cards are given by a financial institution which mediates between you and another party, while debit card is issued by a bank and is associated with your bank accounts directly. Card issuer bank mediates for any disputes related to debit cards.
When you are paying for products or services through credit card, you have to verify it with your signature and in debit card transaction you have to enter your PIN number. Without entering PIN number you can’t make a successful transaction.

• Credit card doesn’t check your account and allows you to withdraw the money according to your credit limits, but a debit card always check your fund details and if you haven’t enough money, it will not make a successful transaction. If you have Switch, Visa or Delta debit card, you may withdraw money without checking funds in accounts, but it will cost you too much.
• Transition through credit cards takes one or two days time, because credit card works on the principle of buying of credit so it doesn’t transfer your money, it uses your credits. While debit card transfers the money on same day, which is so fast than credit card transaction.
• Interest rate of credit card is higher than debit cards.
• Charging fee is different in both. Credit card users have to pay more transition fee than debit card users. Exceptionally some merchants and sellers charge same fee for both but this is not fair.