![]() ![]() Kotak Cards does not guarantee or warrant the accuracy or completeness of the information, materials, services or the reliability of any service, advice, opinion statement or other information displayed or distributed on the third party site. In general, credit cards should be used with more care because you are essentially taking a loan from the bank when you use these.ĭisclaimer: Copyright Kotak Mahindra Bank Ltd.Īt your request, you are being re-directed to a third party site - wherein you can make your payment from a different bank account. They might look the same, but if you have both types of cards, you should use them wisely as the circumstances demand. Thus, debit and credit cards are very different in the way they are used and procured. Credit cards offer you a line of credit and have insurance and safety measures to protect you from fraudulent transactions. They have card protection, but not like a credit card. Security cover: Debit cards are used to take out cash from ATM machines or for shopping with money that you have in your linked bank account. Credit cards offer line of credit hence, banks will only approve your application for issuing a credit card if you have a good credit score. If you have money in your checking account, all you need to do is apply for a debit card and the banks will approve your application. Payments made using credit cards are loans that the banks give you, which you need to pay back on a monthly basis (before a set date).Īpplication process: The application process to get a debit card is relatively simple. All that the bank charges on your debit card is a minimal fee to allow you to use the card. Monthly bills: Since your debit card can only be used to pay money that you already have, there is no monthly bill involved. If you fail to square your dues on time, the bank will slap you with a hefty interest bill. To be more clear, when you make payments using your credit card it is the card-issuing bank that pays the money on your behalf and you have to pay back the bank. They are a type of loan that banks advance to you in lieu of your purchases, to be paid back at a later date. In this way, you can call debit cards ‘modern-day digital cheque books’.Ĭonversely, credit cards are not linked to your checking account. You can only use your debit card to pay money that you already have in your checking account or if you have an overdraft facility then to the limit of the overdraft. How are debit and credit cards different?ĭebit cards are linked to your current account or your savings account and can only be used to carry out transactions up to a certain limit. Debit and credit cards may look exactly alike, but they are inherently different instruments, with different uses. Spencer: For consumers generally, when you’re making a purchase using your debit card, and you’re asked credit or debit, there’s little difference which you choose.We are living in times when most people use either a debit or credit card to complete their money-related transactions, such as shopping or paying for air tickets. ![]() These networks process debit transactions one to two days after it is made, meaning the funds are not automatically debited from the account. When you choose to use your debit card as a credit card - an offline transaction - the transaction is processed through the Visa or MasterCard credit card systems. When making a purchase using your debit card and pin number - known as an online transaction - these networks provide authorization of funds and debit your checking account close to real-time. ![]() Debit cards have their own networks for processing, some of which include Interlink, STAR or NYCE. This situation proved no different, as it took Adam no time to help me understand the implications of choosing debit or credit when paying with my debit card.Īccording to Adam, it ultimately comes down to just one thing - how your transaction is processed. With more than 20 years of experience in consumer and business banking, Adam is a whiz when it comes to all things related to merchants, payments and acquiring. When it comes to BBVA Compass credit card options, one size might not fit all – and that’s a good thing for consumers looking to find just the right card for them. ![]()
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