@geoffrey Credit cards are the game-changers in the finance industry. They make lives easy-going and hassle-free. Before talking about the advantages of one over the other, let us spot the differences between the two.
Differences Between Credit Cards and Debit Cards
With a credit card, you borrow money from the bank or other financial institution you need to repay. Credit cards have a maximum threshold limit. So you have to refund the amount you spend through your credit card along with the levied interest. There are multiple types of credit cards.
A debit card, on the other hand, is a prepaid card. You withdraw money from the money already present in your account. There is no additional interest levied. It is just your money that you are spending through a card. It is your own money that you pay- no borrowing business.
This is the primary difference between how both the cards work. There are a couple of other differences, but this one is the most prominent.
Why Are Credit Cards More Convenient Than Debit Cards?
Here are reasons why everyone is so in love with credit cards:
Strengthen Your Credit Report
Using credit cards wisely and repaying all dues on time improves your credit report. It gives the user plenty of benefits. The credit scores improve through the appropriate use of credit cards. Better credit scores make it easy to apply for future loans.
Credit cards provide various added warranties on multiple purchases. These insurances are in addition to the ones that the brand offers. For example, the insurance coverage you can avail of when buying through a credit card is of particular benefit for expensive items.
Fair Credit Billing
Did you know that if you purchase an item online through your credit card and the thing turns out to be broken or damaged during shipping, you will get a refund? When using debit cards, the amount deducted is just lost. But, of course, one cannot get it back.
Protection Against Fraud
A customer gets maximum coverage against online theft when purchasing through a credit card. For example, if a customer buys an item through a credit card, they get coverage against theft if the fraud is reported on time.
Streamlines the Spending and Keeps Expenses in a Track
You will worry about repayment when you spend money through a credit card. This will keep you from spending much and check on unnecessary spending.
So, which one do you prefer more?