Credit card and debit card: what are the differences between them

In the case of credit cards, it is a financing instrument granted by the bank. Photo: quartoscorro

Having good management of your personal finances is also accompanied by knowing how to use credit cards And the debtor but do you know the difference between the two? Whose One TV We explain that to you.

The debt It has the distinction of being a financial product with which you can pay for goods or services in thousands of stores or establishments. Usually people use them to deposit their payroll Without exposing yourself to bring cash.

In the event that credit cardsIt is a means of financing granted by a financial institution, that is, it is about A form of borrowed money at a monthly interest rate.

With it, you can buy goods and services without cash The financial institution that pays the amount for each business.

The differences between a credit and debit card

user Cards Debt has no opening costIt also does not generate commissions for their use or for annual renewals, although you should take into account that some institutions may charge commissions for withdrawing funds from ATMs of other banks.

The big difference with credit cards is that The money you own is completely yoursYou don’t have to borrow or worry about receiving an unpaid invoice at the end of the month. Compared to the credit against money Banking institution.

Advantages and disadvantages of an ATM card

Features:

  • You can have better control over expenses, as you will only spend the funds on the account associated with the card
  • Do not generate debts with the financial institution
  • Pay without exposing yourself to carrying cash

Negatives:

  • You usually have a maximum daily cash withdrawal limit
  • This card does not contain any kind of protection
  • It does not generate a credit history
  • Institutions sometimes require that they have a minimum balance in the account, otherwise they will close it
  • You cannot exceed the accumulated amount in the event of an emergency

Advantages and disadvantages of a credit card

Features:

  • Some have coverage against theft, loss, misplacement and duplication related to fraud insurance, giving the customer the security of getting a refund.
  • With this product, you can start creating a credit history
  • Some cards allow you to accumulate points, not pay annual installments or travel facilities
  • You can find promotions throughout the year, for example, interest-free monthly purchases or discounts

Negatives:

  • If you are not in the habit of keeping the budget, you can easily lose control of expenses
  • If you do not pay on time, the debt will be reflected in your credit history, complicating access to other credit
  • If you are not planning the expenses, the interest on the debt may become unpayable

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