Difference Between Credit Card And Debit Card

Bank cards, the cards which are used to take out money. There are two types of it. One is a Credit card and the second Debit card. Following are the differences between Credit cards and Debit cards-

1) Eligibility criteria

In credit cards, there is an eligibility criterion of 18 years or in some cases 21 years but in debit cards, there are no eligibility criteria, you can get your debit card at any time.

2) Objective

The objective of a credit card is that money can be used on credit and has to be repaid at a later date but the objective of a debit card is that the money is directly debited from your savings account.

3) Types

In credit cards, there are four types of it which is Standard card, Reward card, Charge card, and Secured Credit card. In debit cards, there are three types of it which is Standard Debit card, Prepaid Debit Card, and Electronic benefits transfer.

4) Charges

In credit cards, there are charges for Interest rates, service tax, and Annual fees. Also, penalty if the credit limit is exceeded. On a debit card, there is no mandatory fee but some banks take an annual fee.

5) Credit score impact

In credit cards, Use of credit cards and timely payments will have a positive impact on credit score. In debit cards, there are no credit points.

This is all five difference that tells us that credit card and debit cards difference. It also concludes that if the card has the same size or design, it doesn’t mean that it has the same properties.

By: Ansh Srivastava

Delhi Public School, Gautam Buddha Nagar