Play your cards right
Choosing between Credit and Debit Cards
Since the dawn of the digital age of banking, two cards have changed the way we perceive money. We’ve come a long way from carrying wads of cash in your wallet to two slim and secure cards – the Credit Card and Debit Card. But when choosing between the two, which do you opt for?
While credit cards were earlier wrongly associated with debt and excessive splurging, the perception is slowly changing now. But even with the increasing use of different cards, do people really know the pros and cons of each? Here’s a view on the ‘why’ and ‘how’ of card usage.
Debit Card –
The key aspect of debit cards is simplicity. Linked directly to your current or savings account, the debit card is an easy and secure way of accessing your money digitally. It enables transfer from your account to another, when you make a purchase or send money to someone. Debit cards are ideal for day to day transactions as they allow you to keep a record of your purchases.
Paying recurring expenses like grocery shopping and gas bills through your debit card enables you to track and analyze budget. Debit cards enable swift payments of enormous sums of money, so you don’t need to keep cash or your cheque book handy.
Debit cards also double up as ATM cards, giving you direct access to cash literally anytime, anywhere. The ease of access along with the enhanced security make debit cards a must have in your wallet.
Word of caution:
While debit cards are secure, one must be very cautious of fraud. Since debit cards are directly linked to your bank account, your bank information can be stolen. So be wary when paying, and never share your PIN or other bank information with anyone.
Another thing to remember is to make sure you have enough money in your account before transacting or you’ll be charged additional overdraft fees.
Credit cards are much more complex than debit cards, but they make life way easier too. Credit cards help you expand your purchasing capacity, allowing you to spend more than you have. Payments are made simpler through Easy Monthly Installments, although they do charge interest after a certain grace period. Here’s a look at the best way of using your credit card.
- Credit cards are ideal for making online purchases. Most e-commerce sites are abuzz with offers on credit card purchases all through the year. Look for zero EMI offers to make the most of deals.
- Pay on time: Paying your full bill each month allows you to skip the hefty interest rates that are usually charged on a monthly basis. It also keeps your credit score healthy, and that’s a real win-win.
- You get reward points for every credit card purchase. Use these points to save more when you spend more. Credit cards like the Bajaj Finserv 4-in1 Super Card allow you to save up to Rs. 55,000 annually through discounts and reward points.
- Remember to not exceed your credit limit. Paying extra interest and other fees is definitely not worth skipping the wait.
- Never max out your credit limit either. Even if you try to pay it off monthly, it damages your credit score and can be a red flag for potential customers.
- Having more than one card makes it harder to track your limits and dues. Open too many credit card accounts. Keep one or two cards that you use and payoff each month to help boost your score.
So now that you know the pros and cons of each card, you can use both to the best of their abilities. After all, why choose between two great options, when you can enjoy both.
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