Credit card and Debit card are two types of plastic money offered by Banks and NBFCs in India and abroad. Though both the products function on the same principle: prepaid or postpaid cards which can be used to conduct daily life transactions instead of using hard cash (currency notes), yet both of the products have distinct features and benefits which make them different from each other. Now, before you get confused - let us tell you the primary differences between a credit card and debit card so you know which card to use.
Usage Limit: Debit card is prepaid cards and it is linked with your savings bank account, thus the usage limit (how much can you spend using the card) depends on your bank account. Your debit card limit is same as your account balance. Whereas, a credit card works on the ‘use now and pay later’ principle: you are approved for a certain credit limit based on your income, and you can swipe your credit card up till your credit limit.
Payment: Credit card can be used for payment anywhere and everywhere, online or offline, national or for international payments. On the contrary, debit cards come with restrictions and might not be an acceptable mode of payment at certain places. For example, if you have a RuPay card, you might not be able to make international payments.
Benefits & Rewards: Credit cards come with numerous benefits like free access to an airport lounge, discount on air-ticket booking, and free movie tickets etc. Even debit cards come with rewards, but they are very limited.
On a concluding note, credit card seems to be a better option. Hence, if you are planning to apply for one, read the terms and conditions.
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