Differences and Similarities between Debit Cards and Credit Cards

Unavailability or the lack of funds is a situation concerning stress and agony. There might occur times when you have needs waiting desperately there to be fulfilled but no money in pockets for the same.

Plastic money, debit cards and credit cards, help in being the backbone in such a time providing you with the necessary support. Most of the people out there just believe that both of them have the concept of providing the money to the cardholder. If you are also someone who believes the same, it is the time to change the thought.

Differences between debit cards and credit cards

Take your wallet out and give a precise view to your credit card and debit card. Do they just look the same to you? Well, maybe in appearance but not how they work. Let us talk about the differences between both of them –

While a debit card allows you to pay the amount that is present in your bank account, a credit card on the other side allows taking out the amount that is not available to you. In simpler words, they help you to pay for the things that you cannot afford by letting you pay an amount that exceeds the amount available to you.

A debit card, since only provides you with the amount in cash that is present in your bank account; it might not be as useful in the case of urgent emergencies. But, on the other hand, credit card, as the name suggests provides you with the credits as per your need, can prove to be a useful option at the moments of emergencies.

Another big difference revolves around the availability factor of these debit cards and credit cards. One needs to have a good credit history in order to get approved for a credit card. But, on the contrary, one can easily get a debit card when he/she gets a bank account.

Similarities between debit cards and credit cards

Now that you are familiar with the differences of debit and credit cards, let us try to know how they both are similar –

  • Fee – while using both, debit card and credit card, an amount of fee including different charges like transfer charges are imposed over their use. However, the amount of fee may differ; it can be higher on credit cards than on debit cards.
  • CVC – a debit card and a credit card, both, have a CVC (card verification code) over them. This code can be a three or a four-digit code present on the back of your card which is used to facilitate all the online or on-phone purchases.
  • Rewards – another similarity between debit cards and credit cards is that they offer rewards on purchases when the cards are being used to make the payments. These rewards are sometimes in terms of points and sometimes, through cash back incentives.
  • Protection – these cards have fraud protection against the fraudulent practices being undertaken by any cardholder. Under the Fair Credit Billing Act, anyone making fraudulent purchases through a credit or debit card is liable to pay the amount.

These are some of the basic similarities that make credit cards and debit cards similar to each other.

What is best, a credit card or a loan?

When it comes to finding funds for the urgent needs and emergencies that arise suddenly in your life, it gets difficult to decide that what might be a better choice. Getting a credit card, can involve a check of credit history, and what if your credit history is not as per the conditions of getting a credit card? How would you manage in such circumstances?

Also, a credit card approval can take a short span of time. One of the best solutions to the problem can be applying for easy loans like the no guarantor loans, which take no time to get approved. So, if you are finding troubles to get a credit card this can be your way out.