Ever wondered how credit and debit cards differ and which one suits you best?
In today’s cashless economy, plastic money plays a crucial role in transactions. Whether you’re swiping at a store, shopping online, or withdrawing cash, you rely on either a credit card or a debit card. But do you know how they truly function?
📚 JAIIB Study Resources 📚
👉 Check Here
👉 Check Here
👉 Check Here
👉 Get Tests Here
👉 Check Here
This blog post, along with our detailed video, will help you understand the key differences between credit and debit cards, their benefits, drawbacks, and how to use them wisely.
Who should read this? If you’re a banking professional, finance student, or simply a consumer looking to optimize your financial habits, this guide is for you.
Stay tuned till the end, and don’t forget to share your thoughts in the comments!
📺 Watch the Full Video Breakdown:
https://youtub
What is Plastic Money?
Plastic money refers to payment cards like credit cards, debit cards, and prepaid cards that allow cashless transactions.
- Credit Cards – Borrow now, pay later
- Debit Cards – Spend only what’s in your account
- Prepaid Cards – Load money first, then spend
Understanding Credit Cards
A credit card is a financial instrument issued by a bank that allows users to borrow funds up to a pre-approved limit.
It is commonly used for online shopping, hotel bookings, airline ticket purchases, and large purchases that can be paid in installments.
Key Features of Credit Cards
- Global Acceptance – Can be used worldwide.
- Reward Points & Cashback – Earn rewards on transactions.
- Buy Now, Pay Later – Offers short-term credit.
- Interest-Free Period – Generally 20-50 days if paid on time.
- Credit Score Improvement – Proper usage helps in building a strong credit score.
Understanding Debit Cards
A debit card allows direct access to funds in your savings or current account.
It is widely used for everyday expenses like grocery shopping, bill payments, and ATM withdrawals.
Key Features of Debit Cards
- Linked to Your Bank Account – No borrowing.
- Instant Transactions – Deducts money in real-time.
- No Interest Charges – Unlike credit cards.
- ATM Withdrawals – Allows cash withdrawals from ATMs.
Credit Card vs. Debit Card: Key Differences
| Feature | Credit Card | Debit Card |
|---|---|---|
| Source of Funds | Borrowed from the bank | Own bank balance |
| Interest Charges | Applicable if not paid on time | No interest charges |
| Spending Limit | Based on credit limit | Limited to available balance |
Best Practices for Using Credit & Debit Cards Wisely
For Credit Cards:
- Pay full balance each month to avoid high interest.
- Use below 30% of your credit limit for a good credit score.
- Monitor expenses regularly.
[FREE EPDF] JAIIB Exam Preparation | RBWM Module B | Retail Asset Product
For Debit Cards:
- Keep sufficient balance before making transactions.
- Enable transaction alerts for security.
Conclusion
Both credit and debit cards are essential financial tools. Using them wisely can help you achieve financial stability.
📥 Download PDF Guide
🚀 Join our course today: [Course Enrollment Link]
📌 Subscribe for more insights!
