Difference between debit and credit card

[italkcash]

The confusion surrounding the credit and debit cards is somehow extreme, as most people tend to be unable to define what makes a card, a credit card, and what makes a card, a debit card.

First of all, debit cards can be issued to everyone, as there is no credit on them (thus the name debit).

Obtaining a credit card does NOT mean that you can go out and rent a suite at the Hilton just because you have a credit card. If the hotel decides to reserve the money on your card (which they would do in 99% of the cases), they will actually deduct a specific amount on the card. Now this is possible on debit and credit cards, but policies define that debit cards are high risk, therefore hotels require credit cards. Now back to if they decide to reserve an amount.

If you credit card has 10$ on it, and the room costs 200$, then even if it is a credit card, it will NOT work. Why is that then. Well first of all, credit cards does not allow for unlimited charge, it only allows for charge on what is available on the card. Basically the only difference between the credit and debit card is that the bank usually issues a credit line on the card (2000$ or so) that is paid back in full or whatever the agreement is with the bank.

Now people would assume that having a credit card gives more freedom, which it does, but that does not mean charging huge amounts more than the card allows. You can do it to some extend and have the account go into minus, but every card has limits, or anyone would buy a Ferrari on it and leave the country. Anyway, post your experiences with debit or credit cards, I still hear different opinions regarding how it works due to different bank regulations etc.

[alcher_27]

Thank you for that information that you provided. Though there is really more freedom in credit cards but you might end in more and more credits. So credit cards are for those people who are financial wise. Debit cards are for those who don't want to get drowned with credits. But I didn't say credit cards are bad. It's up to how one handles their credits.

[Agent Fred]

I think the ditinction is easy and obvious: with a debit card, you're spending money you have; with a credit card, you're spending money you don't have. That should be all anyone needs to know to make a sound decision.

[Ms_Margaret]

Credit card: Every time you use a credit card, you are actually borrowing money that is made available to you by a bank or other financial institution. The institution pays the debt to the vendor, and in turn, you pay the money back to the institution. By signing up for a credit card, you agree to pay back the money that you borrowed, in addition to any interest drawn on the amount you borrowed.

Debit Card: Odds are, you have a debit card in your wallet or purse right now, since many ATM cards are programmed to have debit options. Issued by your bank, debit cards take funds directly from the money that you have in your bank account--in a sense acting like a check, just faster. With a debit card, you don't have to carry cash or checks, and it is very convenient to shop at a variety of places including gas stations, grocery stores, restaurants, and retail stores. They provide instant access to your money and are accepted worldwide.

Debit cards are used like credit cards, meaning that the store you are shopping at 'swipes' them, and then you sign off on the receipt. You don't have to show a picture ID, and there is usually no PIN number for you to punch in.

[gold24k]

I have a debit card which can do what a credit card can do too. It has also PIN number that's why even when stolen they have to figure out the PIN first.

I can buy online too. Verification time is as fast as 1 second. The only thing it cannot do is that, it cannot avail of the store's 6mos or 12mos promo paying period, because it only knows to pay one time payment only. lol

[wendypollman]

A debit card is a good budgeting tool that puts limits to your purchases that is within your budget. While a credit card opens a venue for excessive spending habits as long as you don’t go beyond your credit limit.
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[wendypollman]

There is one big difference between these cards: debit cards deduct money immediately from your account and credit cards allow you to spend money you might not have with the promise you will pay it back later.
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[Xanthia Alysha]

Credit credits are floating credit. Buy now and pay later. Debit cards are issued by the bank you have your account with and when you use it, the money comes directly out of your account.

[titaniumhijau]

i prefer with debit card. But i do have one credit card. Just for emergency case.