When we are in our Bank and we propose (or have convinced us) to make us a payment card, the doubt: debit or credit.
How are they different? Basically, with a debit card the charge into account is direct. In the case of credit, it is a means of financing and allows to buy without disbursing the money on the spot.
Controlling expenditure
A determining factor in this choice between debit or credit is the issue of spending control. The basic family economy has led to an increase in the use of debit cards versus credit cards. There has also been a decrease in deferred payments.
The key, as we see, is that the debit card is a payment tool which automatically generates a charge on the customer’s checking account . In the case of credit card, these charges are usually made at the beginning of each month.
Features of debit cards
- With them you have perfect control of what is spent. In addition to being able to make money in branches and ATMs, it is used as payment in shops.
- The purchase amount generates a direct charge, without delay, on the customer’s checking account.
- They are very useful for daily shopping.
- For its use, you need to have a current account at the bank issuing the card.
- There is usually a daily limit set by the bank, for making payment for purchases.
Peculiarities of credit cards
As we have seen, the main difference is that credit cards are a means of payment, but they are alsoa form of financing. They allow you to make purchases without having to disburse all the money on the spot and with the possibility of returning it in several instalments.
- Unlike debit cards, credit cards are not required to have funds in the bank account at the time of purchase.
- The direct debit of the payroll or the accreditation of stable income is normally required for the issue of this card.
- The credit limit available must be specified in the card agreement, but may also vary over time.
Image sources: Seal Legal Lawyers/cnbc.com