It’s an era of plastic money. Gone are the days where we had to carry a big chunk of cash and be worried all the time. While travelling to outstations, while making huge payments, while shopping, it was a task from counting notes to checking them if they are fake; all was a hazard. But while cards coming in picture, things have changed and these hazards have decreased. All you need to carry is a small 3’*2’ plastic card, in your wallet and you are sorted. The question then arises is which card is better? Credit card or debit card? Let’s discuss both in detail.
What is a debit card? A debit card is a card where you have the money already present in your account. You swipe your card or you withdraw the cash, the amount used is debited from your existing bank account. So you can not over spend. You can spend only that much, which is available with you. So, for people who are not calculative or over spenders, its best option.
Let’s talk about Credit Cards now. A credit card is an option which allows you to use the money even when you do not own it. So, whatever you spend in given to you on the credit based, for few days, mostly one month or the billing cycle of your card. So, if your billing date is 10th of every month, wherever you use your card from 10th of that month to 9th of next month every time the bill is reflected in that cycle of 10th. The benefit here as stated is that you can use the month in advance, even when you do not have. So it a good option when you do not have any cash in hand, but it’s too urgent to use, but at the sometimes, it is a thing which has responsibility. “With great power comes the great responsibility” as the quote states, you have the power to utilize the amount you don’t have, but you should be responsible enough to make the payment of the amount used by you on time.
As explained, both debit card and credit card have their own pros and cons. It’s on us that we fall in which category of people, and what fits us best. Now, the question arises here is: If one has a debit card, why should they have a credit card? There is one huge benefit of having credit card over debit card. And that is credit score. A credit card usage gives you an access to change your credit score. Credit score is the result of the payments you have made across your various credits. It’s also important when you are planning to take any loans, as your credit score is checked by banks or any financial institutions when you apply for the loan. So, a credit card is one of the fastest and easy ways to change your score drastically. But, you have to be very particular in making the payments, only then will the score would go up. Else it can drag you down if you are not a responsible payer.
So, the credit card works as a boon for you when you are actually trying to build your credit score or increase it. When you check your cibil report and see the detailed information, you would come to know that because of your credit card payments made on time, your scores have gone up. This work can not be done by a debit card.
With the major factors explained here, now its clear that what is the need for the credit card even when one has a debit card. All that is expected is that the person should act responsibly and patiently. If that happens, a credit card can create wonders.