debit card and a credit card
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UNDERSTAND HOW DEBIT AND CREDIT CARDS WORK

Many people don’t know the difference between a debit card and a credit card. Some people even think the two mean the same thing and they often use them interchangeably. However, the two cards function differently.

Debit card deduct your money directly from your account balance while credit card charges you money in your line of credit.

Both debit cards and credit cards tend to perform the same functions – like payment for goods and services, online payment, etc. the two cards save you the risk of carrying cash around and help you perform a cashless transaction at any time.

Debit cards are directly tie to your account, and you can easily access them with a pin. You must have money in your bank account before you can use a debit card to make a payment and the money will be deducted from your account immediately.

Credit cards, on the other hand, allow you to make payments against a line of credit. You use credit cards to make small transactions which will reflect on your bill. More like you are borrowing money. Credit cards often have a high-interest rate, though you can easily escape this if you don’t carry the debt over to another month, i.e. pay the money off within 30 days.

Also, it is important you know that most banks issue debit cards, and not ATM cards. People often call debit cards – ATM card, the watch is wrong. You can check your debit card, I bet you will see a debit (card) and not an ATM card.

If you think you need an ATM card, you can visit your bank and request one.

An ATM card is different from a debit card. ATM cards are designed in a way that you can only use them to withdraw money from the ATM MACHINE. You can’t use them to buy things online or make payments…

You can use Credit cards, just like you use debit cards and ATM cards to withdraw from an ATM.

However, the money will be added to your bills… and it attracts interest.

 

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