We tell you the difference between credit and debit card
Debit and credit cards can be great allies if we are clear on how to use them and take advantage of each other’s qualities. Both are characterized as practical and secure means of payment to manage personal finances, because it will always be safer and easier to load a plastic than cash. But in this article we will develop the differences between them so you know which one to use on each occasion!
Payment with debit or credit?
What are the main differences between these tools? The main difference is that in a debit card you can only spend the money that you have available in the bank account, in other words paying with the debit card is like paying in cash. On the contrary, on a credit card the bank gives you a line of credit that is consistent with the income you will charge. Therefore, the plastic finances you a purchase, hence it can be bought and paid in installments. Once the card’s collection date arrives, the owner must replenish the credit that was used.
As for expenses, debit cards do not charge interest rates, since you can only spend your own resources and only what you have available.
On the contrary, in the credit rates the interest rates are the cost of financing their expenses and the interests may vary from the issuer (bank, chain store, cooperative, financing company, among others) and are charged only if they are not Liquidate the total used on the payment date. Regarding commissions, there are also differences, since debit accounts may be charged for account management or minimum balance, and credit accounts may or may not require the payment of an annuity for use.
When should I use the credit card?
- When you shop online: Credit companies offer security features that can be useful when shopping online. In addition to making a purchase verification, they can also offer you insurance against fraudulent purchases.
- When you need time to finance a purchase: The time between buying and collecting merchandise can help you finance.
- When you are putting together a budget: The possibility of paying in installments allows you to organize your finances if you need to make a purchase outside your budget.
- When you are going to buy things that you will use in the future: For purchases such as air tickets and hotel reservations that are intended to be used in the future and can be reserved and canceled, paying with credit is the best option. In case you change your plans, you will be able to get a refund.
When should I use the debit card?
When you do not have the cash in hand but if it is deposited into account: In this case the debit card will be used as an extension of what you have in cash. This way you don’t have to go through the ATMs.
He wants to withdraw money abroad: If you made a trip and need cash, you can see with your bank where you can withdraw money from your account with the debit card .
These are the differences between credit and debit cards so that in the next purchase you make you think well which method suits you best.