Which credit or debit card to use?

In today’s time, almost everyone must have heard about debit and credit cards and most people will have these cards too, but people are often confused about the use of debit and credit cards and how it works. So through this article, we are going to give you information related to this.

Debit Card

A debit card is a means by which you can withdraw cash to your savings account. Debit cards can also be used to make payments electronically. If anyone has a card, the cardholder can immediately transfer the amount through it to the shopkeeper or anyone else and settle the payment. Debit cards are linked to your savings bank account, so a minimum balance is required to withdraw cash or make transactions through a debit card.

Credit Card

A credit card is an instrument through which the issuer allows the cardholders to borrow money. It does not have a link to your savings account. When the cardholder swipes the credit card, the issuing bank pays the seller on behalf of the cardholder. It is also called advance loan or cash. Credit cards can be used by cardholders up to a certain credit limit. Credit limit is fixed according to the income of banks and people. Along with this, the credit card balance has to be repaid within a specified time.

In the following situation, you should use a debit card

To avoid spending too much

A debit card is a great way through which you can control your expenses. Because debit cards are linked to your savings bank account. Using this you can only use the money that is deposited in your account, so you can limit your unnecessary expenses through it.

Better for irresponsible people

A debit card can be a great tool for those who forget the dates or forget to pay their bills. Using a credit card can save you from charges incurred on late payments, as you do not borrow from the bank.

Interest saving

If you are unable to pay the credit card balance, then the credit card balance is charged at a higher rate of interest. If you are unable to pay the credit card bill on time, you can fall into the debt trap. So if you are not able to repay the outstanding amount on time, then use debit card only. A debit card protects you from unnecessary debt and protects your money.

When you need cash

Debit cards are the best way to withdraw cash from ATMs. Although you can withdraw cash using your credit card, but do not use a credit card to withdraw cash. If you withdraw cash from a credit card, interest can be charged on it. Therefore, it is better to use a debit card to withdraw cash.

In the following case you should use a credit card

When your account balance is low

A credit card is the best means of payment, as credit card issuers allow it to borrow a fixed amount without interest for a certain period. If the cardholder fails to pay the amount due after the due date, interest is charged. So if you have a small amount in your account or you are in an emergency and need immediate money, then in such a situation you can use your credit card.

When there is sufficient income

If your income is sufficient and you are sure that the amount spent on credit card will not be a burden on you and you can pay its outstanding balance on time, then you should use a credit card. Using a credit card can help you improve your credit score.

To build a good credit score

By paying through a credit card, you can create a credit history and this improves your credit score. A credit score is an important parameter for taking a loan from a bank at affordable rates. You can positively impact your credit score by using credit cards judiciously. For this, you just have to pay your bills regularly without delay and maintain good credit utilization ratio.

For online shopping

Various online websites offer discounts on shopping with credit cards. Apart from this, banks also give discounts on shopping with credit card, filling of fuel etc. So you can use a credit card to do online shopping.