Difference Between Debit Card and Credit Card

With the introduction of the Internet many businesses opened their online stores and shops. In this way the e-commerce was born. The company who wished to sell their products or services only needed a website with some basic functions. At first they charged the price of the merchandise on delivery, in person but later they started using credit cards.

The use of credit cards made online purchases very easy. The buyer only needs to input the number of his or her credit card and the desired amount will be charged from buyers available credit amount.

When we open an account in any one the banks, the bank will offer us the possibility to connect a credit or a debit card to the account. With the help of the cards we will be able to pay for our expenses without withdrawing cash. The main difference between debit and credit cards is that with debit cards we can spend only the exact amount of money we have on our account. On the contrary with the debit cards, in the case of credit cards the bank offers us a certain amount of loan and basically we can spend more money than we have on our account. After using this feature of the credit card we are required to pay back the loan in monthly rates with interests.

There are advantages and drawbacks with both types of cards.

The main advantage of the debit card is that we learn to spend exactly what we earn and we will not get into unnecessary debt. The other advantage of the debit card is security. If we are frequently using the Internet for various shopping there is a chance that we visit an unsecured website and we get our card details stolen. If we suspect this kind of situation we have to immediately cancel our card in the bank which issued it. The good thing with the debit card is that the thief can only steal the exact amount of money we had on our account and nothing more. The negative thing with the debit card is that we always have to know our balance and plan our shopping in front.

The main advantage of the credit card is that we can spend more money than we have on our account. The bank grants us a certain amount of credit that we can repay in monthly rates with interests. This is a positive thing because we can spend more money than we actually earned in some emergency situations. This is also the biggest drawback of the credit card. The possibility to spend more money than we own can lead to unnecessary shopping and major debts toward the bank. The urge to shop and spend money on non essential items is also one form of addiction.

Learn about Credit history.

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