#Cards (Credit/Debit)

 

Cards (Debit/Credit)

Both Credit and Debit Cards typically look almost identical , with 16-digit card numbers , expiration , dates, and in PIN(Personal Identification Number) codes.

 But they are the different Debit card allows bank customers to spend money by drawing on funds they have deposited at the bank. Credit Card Allows consumers to borrow money from the card issuer up to a certain limit in order to purchase items or withdraw cash.

Credit Cards

It is a card issued by a financial institution and it enables the card holder to borrow funds from that institution. Card holders agree to pay the money back, with interest according to the institution terms.

Advantages

Use during an emergency

Many times when money is simple solution to an emergency. If you get hit with unexpected expense , credit cards can be the quick and easy solution you need.

Purchasing Power

It enables user to make big ticket purchase they might not otherwise  be able to afford.

Traceability

The electronic record keeping that comes with credit cards makes it easy to track your spending and identify fraud.

Rewards

Many cards offer reward programs that will accrue points, discounts, or other benefit like frequent flyer miles.

Convenience

It reduce the need to carry cash, Most retailers accept credit cards and they are pretty much  required for online purchases.

Credit Cards issued in four categories

Standard Cards

It is simply extend a line of credit to their users.

Reward Cards

It is offer cash back , travel points , or other benefits to the users.

Secure Credit Cards

It is required initial cash deposit.

Debit cards

It is a payment card that makes payment by deducting money directly from a consumer’s bank account. It offers the convenience of credit cards and many of the same consumer protections when issued by major payment processors like Visa or Master Cards.

Advantages of Debit card

Safety

You don’t have to carry cash or cheque book .

Easy to obtain

In this once you open an account most institution will issue you a debit card upon the request.

Convenience

In this Purchase can be made using a chip-enabled terminal or by swiping the card rather than filling out a paper cheque.

Readily accepted

When out of town (or out of the country) these cards usually widely accepted.(in this case you have to tell your organization you’re leaving your country).

Debit cards types

Standard

These comes in draw on your bank account.

EBT(Electronic Bank Transfer)

These cards are issued by state and federal agencies to allow qualifying users to use their benefits to make purchases.

Prepaid Debit cards

These cards give people without access to a bank account a way to make electronic purchases up the amount that was pre-loaded on the card.

In addition some debit cards-particularly those issued by payment processors, such as Visa or Master Card –are starting to offer more protections enjoyed by credit card users.