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A comprehensive comparison between credit card and debit card
Many of us have a doubt - what's the difference between a debit card and a credit card? The answer is very simple, a debit card can be compared to a prepaid card whereas credit card is a kind of loan.

A CREDIT card basically works on a principle that if you want to borrow money you do not have - you can. You spend and buy on the basis of money on loan, and based on the amount spent and time taken to re-pay it - you also pay the interest on the original money borrowed. A credit card works based on a loan system like assets. So imagine that you are borrowing it from a bank. If you do borrow it from a bank, then you will pay it back with interest over a time.

When you work with a debit card, you have an account from which you will draw. You can draw only the amount present in your account, but not more than that. If you think about the advantages of a credit card, you can shop at any point of time with any amount of cash though within pre-set limits. But this advantage can be its biggest disadvantage, because you will not know exactly when to stop shopping.

So, you should be wise enough while using credit cards. Keep in mind the income you are getting, so that you can pay back exactly the amount for the credit card. Now, coming to the debit card you know how much amount is present in the debit card, and you know when you swipe how much amount is being withdrawn so you can plan your expenditures.

With debit card you have an advantage, that you don't need to pay interest. But the disadvantage would be you don't have access to unlimited money so you can't shop at any time.

Now, when you are thinking about the two, credit card and the debit card, make sure that you know at what point of time, what exactly you need to use. At times, when you really really need to buy something and you don't have cash, then you can use credit card if you have the confidence that you can repay it. And at time when you have cash then use debit card, as you don't have to pay it back with interest, reported indiainteracts.

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