Credit Card - The Responsible User's Guide

Do you ever get confused about the difference between credit and debit cards? You're not the only one. Debit and credit cards are available at many sales outlets. Both offer practicality and eliminate the need to carry cash. They look the same, a piece of plastic with a lot of glitter…

Principal distinction between a credit and a debit card is how the card is used to attract new customers, i.e. what is the origin of the funds. Debit card is "financed" from your bank account, while credit card is financed from "credit" or figuratively from an approved credit line.

What is a Debit Card?

Debit cards offer the practicality of a credit card, or function differently. Debit cards draw new funds from your checking account when you make a purchase. This is done by withholding the purchase proceeds, i.e. blocking an adequate portion of the proceeds in the checking account… While the merchant sends the transaction to their bank, the bank will transfer the new amount from your checking account to the merchant's account. In today's world, such transactions are certainly instant.

It is important to have a balance on the checking account, or an approved minus, in order for the transaction to finalize.

Let's give you some instructions and some information about debit cards:

- You won't pay a fee on your purchases because the amount is deducted from your balance.

- Debit card consumption does not affect your credit score

- You can also opt out of the direct debit, so that transactions that are repeated are automatically paid, i.e. taken out of your account.

What is a Credit Card?

A credit card is a card that allows you to use new credit lines, and is also known as a credit limit card. A credit card is used to cover basic transactions that according to the principle, you buy, the bank pays the merchant for your purchase, and later you pay the invoice to the bank.

For this type of payment, a credit card is used. Credit cards have high card rates, and the balance on the credit card and the payment method can affect your credit score.

Paying your credit card bill on time will help you to avoid high interest rates and late charges and will help to keep or improve your credit score.

There are other information on credit cards:

• The bank decides on your credit limit based on your credit score
• Usually, no more need to sign a credit card purchase
• For a purchase, you will be charged for interest rates if the payment is over 30 days late

Debit Card vs. Credit Card

Debit cards make it more difficult to spend money because you are limited to the amount available in your current account.

Credit cards risk that you will spend more than you can. Just because the credit limit is $10000, it does not mean that your personal finances can afford such spending in your monthly budget.

Debit cards carry the same contract as credit cards, without you having to pay a new amount or pay in advance. Debit card subscription is a great way to manage your debts and help you to live within your means.

On another hand, some credit cards offer additional security from the purchase price and can be used to facilitate the return of a new customer.

Finally, credit cards can help you in urgent cases, giving you a month to get to the new customer before the bill arrives. This is useful if you are in a situation where you need to pay a larger amount of rent at the same time as you pay for a place or other goods, i.e. it serves as a mini-cash credit.

Selecting the best Card for you

When you are trying to decide whether it is better to use a credit or debit card, you should be honest with yourself and your ability to carry the credit that the credit card carries.

If you have a problem with spending, it is better to use a debit card when you can afford it, so you will be able to fall into the debt and debt burden that credit cards carry.

Protection from fraud

Identity theft and fraud are a big risk in today's world. It is therefore important to know what security measures are in place for your card.

If your credit or debit card details are stolen, contact your bank immediately. Most banks have a 24-hour online support which you can write or call. The sooner you call, the better. In this case you will not be held liable for false charges after you report it as undelivered or stolen. If someone uses your card before you report it lost or stolen, your liability depends on how soon you report it, and you bank policy.