What is the difference between credit card and debit card??
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Answers
Difference :-
Credit cards and debit cards typically look almost identical, with 16-digit card numbers, expiration dates, and magnetic strips and EMV chips.1 Both can make it easy and convenient to make purchases in stores or online, with one key difference. Debit cards allow you to spend money by drawing on funds you have deposited at the bank. Credit cards allow you to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.
What Is a Credit Card?
A credit card is a card issued by a financial institution, typically a bank, and it enables the cardholder to borrow funds from that institution. Cardholders agree to pay the money back with interest, according to the institution’s terms. Credit cards are issued in the following variety of categories:
- Standard cards
simply extend a line of credit to their users for making purchases, balance transfers, and/or cash advances and often have no annual fee.
- Premium cards
offer perks such as concierge services, airport lounge access, special event access, and more, but they usually have higher annual fees.
- Rewards cards
offer cash back, travel points, or other benefits to customers based on how they spend.
- Balance transfer cards
have low introductory interest rates and fees on balance transfers from another credit card.
- Secured credit cards
require an initial cash deposit that is held by the issuer as collateral.
- Charge cards
have no preset spending limit but often don’t allow unpaid balances to carry over from month to month.
What Is a Debit Card?
A debit card is a payment card that makes payments by deducting money directly from a consumer’s checking account, rather than on loan from a bank. Debit cards offer the convenience of credit cards and many of the same consumer protections when issued by major payment processors such as Visa or Mastercard.
There are two types of debit cards that do not require the customer to have a checking or savings account, as well as one standard type
- Standard debit cards
draw on your bank account.
- Electronic benefits transfer (EBT) cards
are issued by state and federal agencies to allow qualifying users to use their benefits to make purchases.
- Prepaid debit cards
give people without access to a bank account a way to make electronic purchases up to the amount that was preloaded onto the card.