We all use both debit and credit cards. It really is best to know the differences between them to better manage your transactions and financial future. And if you are a merchant, then you really need to know the difference!
Every time you purchase something using a debit card, it takes the money directly from your checking account. It is done by placing a hold on the amount acquired for the purchase and when it is turned in by the merchant, the funds are removed from your checking account. Here are a few other quick points:
Debit Card used as Credit
A Check card is when a debit card is used without inputting a pin. When you go to grocery store and you dip your chip and it asks you debit or credit. When you select credit the debit card is used as a check card which is utilizing the Card brand logo on front of the card making the transaction “pending” on your account. When you use your debit card and it asks debit or credit and you select debit, the card is ran as a true debit card and utilizes the banking network which pulls the funds immediately.
A credit card lets you make a purchase against a line of credit, what we know as the credit card limit. All charges in a given period are reflected on your credit card’s monthly bill afterward. A credit card has an interest rate, the amount they charge you to borrow the money until the end of the month. These are relatively high interest rates. Keep in mind that credit card balance and payment history can greatly affect one’s credit score. Other points:
The largest difference between a debit and a credit card account is where each card gets the money for the purchase. Debit cards get the money directly from your bank account while credit cards charge it directly to your line of credit and give you a bill at the end of the month.
Want more information regarding the difference between Debit and Credit Cards? Talk to our experts now! Call us at (800) 644-3909 or send us an email to [email protected]