Every day we often use debit and credit cards. They give us many possibilities. We can make convenient payments in stores without worrying about the amount of cash we need in our wallet.

to payment cards, we have access to funds that we do not have physically. However, credit cards differ significantly from debit cards. Not everyone is aware of this. Let’s check how the credit card and debit card work, and what are the differences between them.

Debit card

bank

The debit card is associated with the personal account of its holder. Often, the popular debit card is awarded to the ROR account (savings and checking account) almost automatically – we open the account and the debit card is sent to the address provided when writing the contract. In addition, we usually do not incur any fees for setting up and using it ( check our personal account comparison engine ).

The bank does not set any criteria that must be met to obtain a debit card. The amount of influence and their regularity are not important.

Debit on the bank account

Debit on the bank account

When paying with a debit card in stores or withdrawing money from an ATM, we use our funds accumulated on the account and debit. Debit is nothing but a negative balance on the account, which will occur when we withdraw more money than we had on the account. Then the account will have a negative account balance, and then interest will be accrued, but only up to the amount borrowed.

The interest rate or period required to pay the debit is set by the bank. In turn, the amount of the debit is usually an amount not greater than the balance of funds accumulated in our account. It is a good idea to treat this type of emergency if we run out of cash for something that can not really wait until the next payment.

Can I pay by debit card online?

Of course! Although it often happens that when making foreign payments, we see that you must provide the number “credit card”, or credit card, most often we can pay with a debit card.

To pay with a debit card on the internet, we usually need to provide the following information: name of the owner, card number, card expiry date and CVV number. Remember, however, that foreign payments often involve additional fees, such as a commission for currency conversion.

Credit card

Credit card

Unlike a debit card – a credit card is a kind of instant credit granted by the bank, and the customer can take it out at any time. To obtain it, you must have sufficient credit standing and earnings.

Having a credit card does not involve the obligation to open additional financial products, such as a personal account, for example. In the case of credit cards, their holder uses money that belongs to the bank to make transactions. It is not worth withdrawing ATM money with them, because such operations are subject to a high commission and in addition they do not benefit from the interest-free period.

How much does a credit card cost?

How much does a credit card cost?

Here we come to the method of credit card settlement – we can pay the card back immediately or use the interest-free period offered by the bank. Depending on the offer, it can be up to 56 days to pay back the debt without accruing interest. Which means that on the list of transactions sent by the bank, after each billing period, there will be no interest charged for non-cash transactions. However, if we do not pay our debt immediately and decide that we will pay it back after 56 days, we still have to pay the “minimum repayment amount” calculated by the bank.

In addition, additional monthly or annual fees are charged for the credit card, and the bank has the right to charge them even in the month in which we did not use the card and the limit granted to us.