Management Notes

Reference Notes for Management

Difference between Debit Card and Credit Card – ATM Cards | Payment System

Difference between Debit Card and Credit Card | Payment System

Debit Cards are the ATM Cards used by the accountholders to withdraw certain amount of cash if they have sufficient amount of balance in their account. Credit Cards are the ATM Cards used even by the non-accountholders to withdraw certain amount of cash in the form of loan as per the standing instructions ,even if the bank balance is insufficient.

 

Debit Card Vs. Credit Card

Basis of DifferencesDebit CardCredit Card

Meaning

Debit Cards are the ATM Cards used by the accountholders to withdraw certain amount of cash if they have sufficient amount of balance in their account.Credit Cards are the ATM Cards used even by the non-accountholders to withdraw certain amount of cash in the form of loan as per the standing instructions ,even if the bank balance is insufficient.

Connection

These cards are required to be connected to checking or saving account which means that only accountholders can use these cards.These cards are not required to be connected to checking or saving account which means that even non-accountholders can use these cards.

Monthly Bills

These cards cannot be used to pay monthly bills.These cards can be used to pay monthly bills. 

Application Process

There are not so much of barriers and restrictions for receiving a debit card.There are some criteria involved or receiving a credit card like the credit history, score, etc. of the applicant.

Availability of Credit

One can only use the money available in their accounts.One can use credit (i.e.; amount more than available in its account) with generally a payback period of 30 days.

Limit for Spending

On the basis of fund available in the bank account.On the basis of credit worthiness of the accountholder , credit limit is set by the issuer.

Interest Charge

As , there is no scenario of taking credit facility using this card which means that interest is not charged.Interest is charged on the outstanding balance.

Credit history

The credit history of cardholder does not get affected.The use of credit card if done responsibly with timely payment can improve the credit ratings of the person.

Play Quiz- Test Your Knowledge

[wp_quiz id=”6961″]

[wp_quiz id=”6966″]

Which of the following can increase your credit card’s apr?

a. Paying the minimum
b. Missing a credit card payment
c. Paying off the full balance
d. Cashing in on rewards points

Which of the following is not a common credit card fee?

A. Late fee.
B. Annual membership fee.
C. Balance transfer fee.
D. Minimum payment fee.

The amount of money you can charge to a credit card is called:

A. Credit Line
B. Credit Limit
C. Fees Charged
D. Minimum Balance

 

 

Smirti

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