Credit card vs debit card. What is the difference?
Which is better, a credit card or a debit card? And in general, is there any difference between them? After all, they are issued the same plastic, each card has a hexadecimal number. To withdraw money or pay for purchases with the card, you must enter a four-digit code.
Yes, it is true. However, in fact, there are much more differences between the two types of cards than you would expect.
The main differences between credit and debit cards
- Using a debit card, you use the money you previously deposited with the bank. For example, you added money to the card through a terminal or received your salary on it. If you want to use the card to set a credit limit, i.e., you need the amount to buy certain items or money for other purposes, a debit card will not help you.
When you go to a bank and apply for a loan amount, and the credit limit is successfully negotiated, the bank will issue you a credit card.
- The level of protection against credit card fraud is slightly higher than that of a debit card. However, new-style debit cards are ready to argue with this. As for commissions, credit cards often do not require payment of annual fees, but this is not always the case. In any case, the amount of commissions must be clarified with the bank that issues you a debit or credit card.
Today, banks do everything possible to motivate their customers to issue credit cards. Thus, many banks provide an opportunity to get additional discounts, withdraw cash without commission, collect bonus miles and save on flights, etc.
Paying on time for their credit obligations, credit card users receive bonuses for making profitable purchases.
- With credit cards, you can also purchase insurance on favorable terms, as well as receive additional insurance for the goods you buy, which will complement the manufacturer’s warranty.
A nice feature of a credit card is that it limits liability for purchases made after the card has disappeared. If your card was stolen and you reported it in time, you risk an amount that is limited to $50. By the way, the same protection is given to debit card users, but only if they report the theft within 48 hours after it became known. If this is not done, the responsibility of the debit cardholder will increase to $500. If the theft is not reported after 60 days, the cardholder takes full financial responsibility.
What about debit cards?
As for shopping, credit card users also have certain advantages. If you purchase an item with a credit card and the item is damaged or not delivered to you due to loss, you can challenge the purchase. When you purchase an item with a debit card, you have no right to challenge the purchase in such cases. The only option when a purchase can be cancelled is if the seller initiates such cancellation.
If your debit card has been stolen, you will have to wait until the investigation is complete. Until then, you will not be able to count on any refund. Disputed fees are also a common headache for debit cardholders, while credit card fees are automatically deducted.
Moreover, many car rental agencies will not provide you with services without your credit card details, at least not without a backup copy.
The advantage of a debit card is the minimum commission or no commission at all. If the bank issues you a prepaid debit card, you will have to pay extra not only for its use, but also for the activation of such a card.
However, you should not think about the fact that the credit card offers you the same benefits. This only happens if you fulfill all your obligations on time, but if you exceed the limit or delay another payment, you will have to pay higher fees and penalties.
The bottom line
Keep in mind that your potential customers actively use both debit and credit cards. Therefore, it is advisable to give them all opportunities to pay by these and other popular methods at once. Trust your online payments to PayOp, and we will provide you with the best conditions and commission below the market average, a high level of security, fast withdrawal, one click card tokenization and other benefits.