Having one or more credit or debit cards is something very common. Its use has become enormously popular , and it is a convenient means of payment. In addition, in the midst of the COVID-19 pandemic, paying with them is much more advisable , since they prevent the transmission of the virus through coins and bills. These means of payment have similarities, but do you know what the differences are between debit and credit cards? Read carefully to find out more.
What are bank cards?
These are financial products that already have a long life . Bank cards consist of a "plastic". This is how they are called in the slang of entities, which are linked to a bank account. Every time they are used, whether it's a cash withdrawal or a purchase. The amount we use will be subtracted from the amount we have in the bank account. But bank cards operate differently, depending on whether they are debit or credit.
Differences between debit and credit cards
To begin with, debit cards are those that allow us to operate with the capital we have in our account. That is, you will provide us with the cash or let us make the purchase for whatever value it is until we exhaust the balance. Credit cards provide the user with the possibility of spending money that they do not have. And the cost of the operation or withdrawal is associated with interest.
Many debit and credit cards have no maintenance costs. Either this is assumed by the financial institution as long as an operation is carried out with it for a minimum amount. This cost is usually variable, and sometimes, and if we are good clients, we can request the entity to cancel the commission. Still not having spent with them.
Types of payment with credit cards
Credit cards allow payment in various ways. With them you can pay the amount of the accrued during a period of time, generally at the end of the month. Full payment of what is consumed can be made, in which case there is no or minimal interest. Pay a fixed monthly fee with your interests, or a percentage of the debt we have. In this way, the capital that we have to amortize can be paid little by little . Some debit cards allow a certain margin, generally small credit, which can be paid either at the end of the week or the end of the month.
Credit cards usually require a feasibility study by the financial institution. Which needs to know that we are going to pay the fees and not become defaulters. Both are very popular and convenient products, although credit cards must be used wisely. Failure to do so can lead to significant debt that is difficult to manage.
Finally, debit and credit cards are accompanied by insurance, which is very interesting in the case of the latter. They protect us from fraudulent use, theft or provide us with coverage in the event of travel incidents. In order to take advantage of this type of insurance, it is very interesting to properly know the conditions when we hire it.
The differences between debit and credit cards are various. But combining them for our operations, be it shopping or travel, can be a good way to take advantage of their full potential.