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In the cashless banking system, holding a credit or debit card is inevitable in today’s times. Also, there is a reason that these are the best financial tools for day-to-day expenses. Both credit cards and debit cards have their own set of perks and penalties, and using them wisely makes a huge difference in personal financial management. In this article, we are going to dig deeper into the benefits of using credit cards over debit cards and how it has revolutionized the banking system.
To use the funds from the account, the bank issues a debit card to the account holder. Whenever he/she makes a transaction (a purchase or fund transfer), the amount directly gets deducted from the bank account. Debit cards are an effective and convenient way of cashless transactions. But when it comes to benefits, a credit card wins over a debit card.
A credit card provides short loans. In other terms, each transaction or purchase made on the credit card is a loan taken from the bank. The cardholder requires to pay that amount with or without interest within a time frame as per the credit card issuer’s norms. A credit card comes with numerous benefits such as shopping reward points and discounts, which can be redeemed from time to time. This increases the benefits of using a credit card over a debit card.
In general, both credit and debit cards may appear the same with 16 digit labels, secret PINs and CVV. However, once you know how they work, it becomes easy to plan your expenses. Listed below are five benefits of using a credit card over a debit card.
Apart from the earlier mentioned perks, credit cards also accompany plenty of additional benefits such as easy EMI options, fuel rewards, and travel and stay reward points. The credit card offers benefits in rental services as well.
Clearly, the benefits of using a credit card over a debit card for daily expenses are comparatively more. However, it is also important to understand that credit cards can have bigger penalties for missing out on repayment dates and have annual charges, which doesn’t apply in the case of a debit card. If that is not a big concern for you, then best credit card is the best option for daily expenditure and managing financial expenses.