Debit cards and credit cards help you make payments even if you do not have enough cash in your wallet or want to make an online transaction. But there are significant differences between the two.
Debit cards are issued by banks against your current or savings accounts and you can use it to spend only the amount of money already available in your accounts. When you swipe your debit card to make a payment or withdraw money from an ATM, the money is directly deducted from your account immediately. This could be a problem during emergencies, in case you do not have sufficient balance in your account to spend.
On the other hand, a credit card gives you a credit limit from where you can borrow funds to make payments as and when required. You need to pay back the borrowed amount within a stipulated time , following which the limit is restored. The credit limit depends on various factors such as your credit score, age, income etc. Interest is charged on the outstanding amount only in case of delayed payments. You can also avail substantial reward points, cashback and discounts on movie tickets, online purchases, travel bookings and more.
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