Credit Card vs. Debit Card: What are the Differences between them?

Opening a bank account and procuring a debit or credit card is one of the signature signs of ‘adulting’. Society now demands a lot from individuals at a very young age and, with the passage of time, it has become increasingly important to educate yourself on the basics of the financial world. Before opening an account and commencing your ‘adulting’ journey, it is imperative to understand basic terms and the differences between these terms, so that you know when to outsmart your seller or when they may be lying to you.

From definitions and miscellaneous terms to pros and cons, we have got you covered on your journey to fully understanding everything that there is to know about banks and the implications of your investments with banks.

We initiate this process by first dispensing basic credit and debit card knowledge, including the difference between credit cards and debit cards, onto you. To aid you further in your conquest we will also dispense some information on the best credit card for online shopping, according to consumer reviews, as we recognize the surge in online shopping within the past year. In must be noted, however, that this information is subjective.

Definitions

Credit Card: Permitting you to make purchases without physical money with just a tap or swipe, these cards have a credit limit until which you can keep making transitions. The credit limit is decided on by the credit-granting institution you approach. This institution looks into your credit history -- payment records, other available credit cards and any misconduct with them and loans or debt records -- before setting your credit limit. If the monthly bill payment is not made on time, your interest and credit score will deteriorate.

Debit Card: A debit card is a lot simpler to wrap your head around than a credit card. When your debit card is swiped or tapped, a direct deduction is made from your bank’s checking account. In other words, it emulates the function of physical money but is in a plastic form and is more convenient to carry around.

Type of Cards

Credit Card: Credit card categorizations vary across financial institutions and countries. We will elucidate on the standard credit card types and their corresponding differences. There are two main types of credit cards that consumers, despite holding a credit card for years, sometimes tend to use its terms interchangeably -- secured and unsecured credit cards. Secured credit cards are generally marketed towards those individuals who need to rebuild their credit. Credit providers usually recommend investing in a secured credit card if you have a history of credit default. Although subjective in nature, these cards are associated with lower reward provisions.

To attain this card, you would have to provide the pertinent institution with a security deposit. Unsecured credit cards, on the other hand, can be procured without a security deposit and come with various reward schemes. Credit card proponents sometimes mention reward credit cards in their debates. Reward credit cards offer you a spectrum of benefits such as cashback, reward point accumulations, and discounts upon completing transactions. They may also offer travel benefits such as VIP lounge access and free tickets, travel mileage benefits, and shopping discounts.

To garner the various advantages of these cards, the Bajaj Finserv RBL Bank SuperCard should be your go-to card. They equip their customers with access to the best credit card for online shopping. The credit cards discussed are continuously available for utilization. However, charge credit cards are not very common. Charge credit cards have no pre-established spending limit.

Debit Cards: Unlike the types of credit cards, the classification of debit cards is relatively straightforward. While standard debit cards draw money from your checking account, prepaid debit cards provide their owners with pre-established spending limits when access to a bank is difficult. Prepaid debit cards are rare and are not to be confused with credit cards. Debit cards are usually issued by major payment processors such as MasterCard and Visa