Debit Card vs Credit Card, This is the Right Time to Use It
Currently, buying and selling transactions are increasingly easy to do. The method also varies to the point that it makes you confused in choosing which one best suits your needs. Of the many payment methods available today, payment using a debit card and credit card is the most popular. Before examining further which ones are used according to needs, let us know in advance the use of the two cards.
Use of a Debit Card (Debit Card)
Many people mistakenly think that a debit card is the same as an Automatic Teller Machine (ATM) card. In fact, there are significant differences between the two. Judging from the physical, the two cards are indeed similar. However, these two cards are very different when viewed from their use.
ATM cards are used at ATM machines and transactions that can be done are only limited to those listed on the machine, such as cash withdrawals, transfers, electricity payments, credit purchases, and others. While debit cards are used in making payments when shopping. The process takes place through a device called Electronic Data Capture (EDC) or Magnetic Stripe Reader. However, debit cards can also be used at ATM machines. So, the balance in your savings will be deducted if you make payments using a debit card. It would not be a mistake to conclude a debit card as a payment instrument in lieu of cash.
Use of Credit Cards
The function of a debit card and a credit card is almost the same. This is what makes users of noncash payment instruments confused. Yes, the two cards generally function as a means of payment when buying and selling. So, what is different about the two cards?
The big difference between debit cards and credit cards is the payment system to debit and credit card issuing banks. As explained earlier, a direct debit card deducts some of the funds used for spending at that time. While on credit cards, money withdrawn for shopping transactions is a debt that must be paid. And to pay it, you make an installment payment at a certain time (usually per month) to pay off existing shopping debt.
Then, when is the right time to use it?
Debit cards are suitable for shopping for daily or monthly needs. This card is suitable for those of you who want to avoid wasteful nature and want to shop as needed. You can separate spending money by creating a special account for shopping and making a debit card from the account. If one month’s shopping is limited to $2,000,000, more than this nominal debit card cannot be used.
Well, if you don’t want to bother using two or more cards, a debit card can be a suitable choice because it can be used to make transactions at ATM machines. However, please note that there is a 3% discount in advance. While credit cards are suitable for enjoying cashback, bonuses, or rewards. Banks that provide credit cards usually work with merchants to create promos so that many people are interested in using a credit card.
Credit cards are also suitable for payment of daily transportation costs. Several types of credit cards provide facilities for purchasing plane or train tickets. Air Miles facilities on credit cards provide several benefits, such as airport lounges, free tickets, and even holiday packages abroad. If you use a train, you can use business class at economic prices.
In addition, credit cards can also be used to pay for motorcycle taxis or online taxis. That way, we can save on expenses for transportation every month. What about private vehicles? Take it easy, there is a credit card facility called BBM cashback which provides cheaper fuel prices.
Prioritize the Scale of Needs Priority
From the explanation above we can know the difference between debit cards and credit cards. Starting from the use in buying and selling transactions, the benefits that can be enjoyed, to the payment of daily transportation costs. Just find out what needs you want to meet. Then match which card is the right one to use. Don’t forget, stay on the priority scale so that expenses are maintained.