Debit Vs Credit Cards: Know The Difference; Which Is Better For Your Finances

Do you ever wonder about the difference between a debit card and credit card? Do you know what is better for your finances? In this article, we will break down all your queries and give you definite answers so that you can stay on top of your financial planning.

While both can be used to make digital payments at shops, many finance experts will tell you that using a credit card can be beneficial for you. One of the best reasons is that many websites offer discounts on credit cards issued by specific banks. It can help you save a huge amount of money on big purchases.

Here are a few more reasons why you must use a credit card.

Using Credit Cards Can Help You Keep Your Savings Intact

Every credit card has an upper limit ensuring you do not go overboard with your expenditures. It allows you to protect your savings and keep a check on your expenses.

If you are using a debit card, it does not have any upper payment limit. You might end up exhausting all your savings before the end of the month. Hence, a credit card is beneficial for you if you splurge money (Protect Your Money From Courier Scam) and often experience financial anxiety.

Credit Cards Offer Bigger Discounts Than Debit Cards

If you have ever tried to purchase any electronic items, like mobile phones, tablets, ear pods, headphones, or computers, online, you must have witnessed a huge list of offers on credit cards.

These days, many websites offer discounts on payments made by debit cards of specific banks, but the amount of savings would be lesser when compared to a credit card.

When booking movie tickets, filling your automobile’s fuel tank, booking a holiday, or buying train, bus, or flight tickets online, you can avail of huge discounts or cashback on credit cards. Moreover, you don’t have to pay credit card bills right away, you can take time to pay your dues.

Processing Fees ON Credit Vs Debit Cards

Whenever you decide to use an ATM to withdraw some amount via debit cards, a small amount of processing fee is levied on every transaction. It is only applicable when you withdraw money from a different bank rather than from the one that issued your debit card.

An interesting thing to note is that many credit card companies charge an annual fee for spending less than the limit of your card. You can use these cards to withdraw money from the ATM, but be ready to pay high interest on the amount.

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Credit Cards Help You Build Credit History

When you make payments via credit cards, it records all your transactions and helps you improve your credit score, history of repayment, debt, and other factors associated with the card.

This score helps you get approval on loans a little easier as you can show that you have been punctual with your repayments. It also brings your financial planning into the spotlight. Debit cards don’t affect your credit score and cannot help you when applying for a mortgage or car loan.

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Depending on your financial capabilities and situation, you must choose between debit and credit cards for making payments. For long-term use, credit cards can immensely help you keep your financial condition under control if you are watchful of your expenses.