What is the I Difference between a Debit Card and Credit Card
A Credit Article Contributed by Annie Bauers
Why are There Different Kinds of Visa and Mastercard?
There are different types of credit cards available. If you do not know the difference it will be helpful to you as a consumer to learn about the two types of cards.
What is a Debit Card?
A debit card looks just like a credit card, they even have Master Card and VISA logos on them. However, they are not credit cards. Debit cards work the same way as a credit card. When you make a purchase the vendor slides the card exactly like a credit card and you will be given a receipt.
Do I Have to Pay Right Away When I Use My Debit Card?
Yes, when the card is run through the funds are taken from your bank account directly. If the funds are not in the bank account the transaction will be denied.
What is a Credit Card
A Credit Card is exactly what it says -- a card that grants credit. When you make a credit card purchase it is processed and if you are not over your limit the transaction will take place. You will then be billed for the amount you charged, normally broken down into a payment by thew company who issued the card.
What are the Positives of a Debit Card?
A debit card offers you the freedom that a credit card does. If you are low on cash or do not want to carry it with you or want to make purchases online or over the phone you can use your debit card to do this. However, you can only use the debit card to make purchases no more than the amount of money you have in the bank that issued the debit card. You have the convenience of a credit card without incurring debt.
Is There Anything Negative about a Debit Card?
One downside of debit cards is that they do not contribute anything to your credit rating. When you use a debit card it's as if you have just made a cash transaction and nothing is reported on your credit report.
What are the Positives of a Credit Card?
The major advantage of a credit card is t works towards your credit. Every time you use it it is recorded on your credit report. When you make timely payments on your credit card balance it improves your credit rating. However, it can damage your credit as easily as it can improve it so you should always use your credit card responsibly.
What is the Downside of a Credit Card?
You pay interest on a credit card. When you use a debit card you are not be charged interest on the purchase.
How Do I Know Which is Best for Me?
If you are unable to qualify for a credit card of your own a debit card is a good choice. Although it will not help raise your credit score, you will have the convenience of a credit card.
