Credit Cards vs Debit Cards – Which One Should You Use?

You’ll hardly find people who are still using cash for literally everything! Now, the majority of users use either online payments or card payments. Whether to buy anything or pay for any service, people immediately take out their phones or cards to make payments. When we say phone, it means UPI or netbanking, and by card mean credit and debit cards. Some say the debit card is best because you don’t have to pay any interest later on your purchases, while some say credit cards are best because you can purchase anything without worrying about the money. If you’re confused about which one you should choose, then don’t worry because we will help you make the right decision. To determine which is better, let's compare credit cards vs debit cards.

About Credit Cards

Credit cards are virtual money in the form of a plastic card that has a certain limit and can be used for making payments. When you purchase anything or make payments using credit cards means you’re borrowing that money from banks and will have to return it with a certain interest rate. Credit cards are now in high demand because they allow you to fulfill your needs without worrying about the immediate need for money. 

Today’s markets are filled with varieties of credit cards, such as:

• Shopping credit card
• Travel credit card
• Cashback credit card
• Reward points credit card
• Fuel credit card
• Lifetime free credit card

Advantages of credit cards

The benefits of using credit cards are:

• Emergency funds: A credit card is the greatest option if you need immediate financial support.
• Convenience: Since credit cards are accepted everywhere, using them to make payments is quite convenient.
• Rewards: Credit cards are used by people because they provide substantial benefits like cash back, discounts, and gift cards.
• Boost credit score: Making on-time payments and using your credit card responsibly will help you improve your credit score.
• Safe: Banks monitor your transactions and take prompt action in the event of fraud or scam, so credit cards are safe. Additionally, it can be risky to carry cash around, but credit cards do the exact opposite.

Why should you use credit cards?

• If you are starting your financial journey and want to build a good credit score, you can do it by taking small loans with credit cards and paying them on time to build a healthy credit history.
• If you do not have sufficient funds and still want to purchase something, then use a credit card and purchase on the EMI option.
• Use a credit card to get free protection against fraud or scams. Also, get free card insurance with a credit card.
• If you have kept your credit score high, a credit card can help you obtain a personal loan. 
• Earn unlimited cashbacks, rewards, vouchers, discounts, and much more if you use a credit card.

About Debit Cards

Debit cards are also physical cards through which you can make payments, but the money that you use to pay is the money that you have deposited into your account. In other words, the bank where you maintain your current account or savings account gives you a debit card that you can use to pay. Until you have funds in your account, you can use a debit card. You are unable to use your debit card as soon as your account is empty.

You can select from a variety of debit card kinds, including:

• Master debit cards
• Virtual debit cards
• Rupay debit cards
• Visa debit cards
• Contactless debit cards
• Standard debit cards

These cards are also sub-categorized into different variations, such as platinum, gold, etc.

Advantages of debit cards

The benefits of using debit cards are:

• Financial planning: Debit cards are best when you use your finances accordingly. If you're someone who preplans their finances, then debit cards are a big advantage for you. 
• Safe: Debit cards are one of the safest forms of cards as they’re encrypted with a safety chip, require a PIN whenever you have to use them, get an instant message if someone is trying to guess your card PIN, and most importantly, require otp for a successful transaction.
• No debts: Unlike a credit card, which allows you to borrow money, a debit card allows you to pay with money directly from your account. Debit cards help you stay out of debt by limiting wasteful spending.
• Easy to get: Since debit cards are offered once you open an account in a bank, you won’t have to wait for any approval or a lengthy process. 
• Immediate access to your money: As debit cards only work when you have money in your account, you can easily track your money and keep an eye on your balance.

Why should you use Debit cards?

Opt for a debit card if you want:

• If you don’t want to pay interest on purchases and stay away from debts, then you should definitely use a debit card as it uses your own money that you have kept in your account.
• If you’re someone who spends very cautiously, then use a debit card because you’ll be using it when you are sure about something. Debit cards prevent you from making careless purchases.
• You don’t have to pay any interest on cash withdrawn from a debit card, so it’s best to use a debit card in such cases.
• If you’re someone who travels around the globe, then you should use a debit card because they’re accepted worldwide and easy to carry.
• If you’re someone who doesn’t like to pay unnecessary charges for using a card, then you should choose debit cards because they usually don’t have annual fees.

Credit Cards vs Debit Cards Comparison

Here’s the final comparison between credit cards vs debit cards that can help you decide which one you should use:

Also Read :-  5 Top Credit Cards for Self-Employed – Apply Online Now

Bottom line

In a nutshell, the credit cards vs debit cards debate doesn’t matter much because both are perfect in their place. Based on your demands, you can choose which one to use. If you’re someone who likes to keep a check on their budget and doesn’t like to pay any kind of interest on their transactions, then a debit card is best for you. But if you’re someone who likes to purchase whatever they want to without thinking about the financial limitation, then you should use a credit card. Whatever you decide to choose, just make sure you check all the factors that are associated with the card. 

Frequently Asked Questions? (FAQs)

What is the difference between a debit card from a credit card?

The primary distinction between a credit card and a debit card is that the latter enables you to borrow money to make purchases, whereas the former enables you to use money from your account to complete transactions.

Which is the best for regular spending: A Debit card or a credit card?

Debit cards are the best option for everyday purchases.

Which card is best for managing my finances: credit or debit?
You should use a debit card to manage your finances since it makes it simple to keep track of your money.