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Many of us are confused about differences of bank cards; particularly debit cards and credit cards. We’re not sure what kind of card we need more in our daily dealings, or which one is best for us generally. In order to understand the differences between the two types, we spoke with Mr Khaled Ammar, an official at Emirates NBD. He explained the five most important differences between a debit card and a credit card.
1) The debit card is simply a card for immediate deduction from your bank account’s balance; your maximum payment with the card will be the actual account balance. However, the credit card provides an additional balance in the form of a loan, with a maximum amount according to your agreement with the bank. It needs to be paid within between 45 and 58 days without interest, according to the issuing bank.
2) You receive a debit card after opening a bank account without difficulty. The credit card, however, requires more complex conditions. Banks often ask you for plenty of paperwork, and the maximum amount is related to monthly income.
3) With a debit card, you can draw from different ATMs, or buy products without commission, but with a credit card, money withdrawals come with hefty interest, according to the time of withdrawal. When a credit card is used at a store, there will be a 45-day grace period.
4) Due to danger for data theft, it isn’t possible to use a debit card in some online stores. The person must inform the bank through customer service in order to have access to it, unlike the credit card, which is available for you to buy anything from the Internet.
5) The credit card has an advantage of direct instalments with banks, according to terms and conditions, and at times, they are interest-free – unlike the debit card, which you cannot pay by instalments.
In conclusion, every bank has its rules; accordingly, always check the bank’s terms and conditions before making any transactions.