Credit and debit cards enable you to save money on your purchases. But have any of you ever observed that when your wallet is empty, you prefer to pay with a debit card, and once your bank account is drained, you switch to a credit card? But did you know that using credit cards from the start can help you to save more money on your expenses than using debit cards? Apart from credit cards, debit cards have several advantages, but it is difficult to beat the savings you can achieve with the right credit card. Before going any further, it’s important to examine the difference between a debit and a credit card and how they work.
What is a Credit Card?
A credit card is a plastic or metal card issued by a bank that enables customers to borrow money for purchases. Cardholders must repay the money to the financial institution within the time frame specified. Otherwise, the card company will charge you a high-interest rate for your late payment. One of the main differences between debit and credit cards is that no one requires a bank account. Even if you don’t have an account with the same bank, you can get a credit card. These are available in a variety of categories to meet the needs of different individuals. You can choose a credit card based on your needs.
Benefits of using Credit Cards
Given that debit cards now offer similar advantages to credit cards, credit cards are still assumed to be safer for all transactions than debit cards. Besides security, several other factors also point to credit cards being preferable to debit cards, some of them are mentioned below:
Secured
The majority of credit cards provide purchase protection against fraud as well as some degree of splitting from your bank account. As debit cards are directly connected to your bank account, the possibility of fraud also raises. For example, if a thief steals your debit card and uses it to make a purchase, after which the funds will be taken out of your bank account, whether or not you have proceeded with the transaction.
Build Credit History
If you want to establish credit or if you want to raise your credit score, then using only a credit card appropriately can help you with this. Your credit journey can be greatly aided by using credit cards responsibly, which includes paying your bills on time, keeping a low credit utilization ratio, and refraining from applying for multiple cards at once. Therefore, picking a credit card is always a good idea if your objective is to raise or improve your credit score.
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No bank account is necessary
Having a bank account with the bank is not necessary to obtain a credit card. This is because your credit cards and bank accounts are not connected. It is a method of borrowing money and returning it. You can use credit cards to make purchases even when you don’t have the cash on hand and then pay the balance off whenever it’s convenient for you. On the other hand, having a saving or current account is required to use a debit card.
Cashback benefits or rewards
Credit cards are a more popular way to earn rewards or cashback, even though debit cards also offer these benefits. This is also true because credit cards provide better benefits than debit cards. However, you should keep in mind that while debit cards are free, credit cards frequently have an annual fee.
Conclusion
Credit Card holders have several privileges that debit card holders typically do not receive, whether it be rewards programs, extra benefits, or increased security. Any bank where you have a savings account probably issues you a debit card that also serves as an ATM card. Even though you can use a debit card for all of your in-person and online purchases, credit cards have several advantages. Without a doubt, you need to think about getting a credit card.
Jyoti is unique blend of expertise, extensive experience, and a genuine passion for credit cards positions him as an exceptionally well-suited and engaging content writer. His profound insights into the Indian credit and banking sectors have empowered him to craft numerous informative and captivating blogs.