Credit cards and debit cards appear similar, but they function differently. A credit card is a short-term loan provided by the card issuer that requires repayment, whereas a debit card allows you to spend money from your savings/current account.
Most young Indians, whether salaried or businessmen, carry at least one of these cards (credit or debit) for routine transactions such as ATM cash withdrawals, fuel, bill payments, and grocery purchases, as well as larger transactions such as fee payments, flight bookings, and durable consumer purchases. However, many customers are unaware of the key differences between a credit card payment and a debit card payment and which is preferable.
When you use a debit card, the amount of your purchase is deducted from your checking account almost immediately. When you use a credit card, the amount is charged to your credit line, which means the bill will be paid later, giving you more time to pay.
The Pros and Cons of Debit Cards and Credit Cards
Now that you understand how debit cards differ from credit cards let’s look at their advantages and disadvantages.
Benefits of Debit Cards
- There is no debt because you are using your own money;
- Because there are no interest charges, it is less expensive to use.
- It also functions as an ATM card, allowing you to withdraw money.
- Obtaining a debit card is simpler and faster.
- It does not help with credit history development.
Drawbacks of Debit cards
- Because money is debited directly from your account, you cannot leave spare cash.
- If you don’t keep track of your spending, it can be difficult to balance your passbook at the end of the month.
- You may be charged a fee if you withdraw money from a different bank’s ATM.
- There is very little protection against debit card fraud.
Benefits of Credit cards
- Credit cards are extremely convenient because they eliminate the need to carry cash with you.
- Credit cards can assist you in improving your credit score.
- The rewards you earn are significantly higher than those earned with debit cards.
- Because they have relatively high credit limits, they give you more spending flexibility.
Drawbacks of Credit cards
- If you do not pay your bills on time or in full, you will be charged a high-interest rate.
- Missing a payment (even for genuine reasons) can have an adverse effect on your credit score. You will then have to work much harder to build it.
- You may be tempted to overspend even if you have a credit limit. This leads to debt.
Ways to make online credit card bill payment
The Internet has made banking easier. Almost all banks in India offer Internet Banking, and some others use third-party bill payment services to provide online payment channels. Listed below are several methods for paying your credit card bill online.
• NEFT/RTGS online funds transfer via internet banking
• IMPS method
• Bill Desk
• Auto debit option
• Mobile wallets and payment systems
The benefits of credit card bill online payment
Online credit card bill payment has several advantages over offline payment, making it a popular option for paying off debts. These are some examples:
• Convenience: Online credit card bill payment is faster and more convenient.
• Security: It is more secure because it has been authenticated through multiple layers of verification.
• Automation: You can automate your payments to ensure on-time payment without the need for manual intervention.
• Proof of Payment: Online payment records are useful for taxation and budgeting purposes.
• Green Initiative: It is environmentally friendly because it saves paper.
• Cost-effective: You can avoid charges associated with credit cards payment methods such as cash and check.
Conclusion
In short, it can be challenging to determine when each card should be used. Consider using your debit card for everyday purchases because the money will be deducted from your checking account immediately. On the other hand, you could use your credit card for larger purchases, such as a rental car or a hotel room, to save money by the time you have to pay.
MobiKwik makes it simple to pay your credit card bills. Simply follow a few simple steps to pay credit card bills online. You can also save money on a credit card payment by taking advantage of the numerous bill payment offers available on the MobiKwik app.
