Tuesday, 18 January 2022

Credit Card vs. Debit Card vs. ATM card – Comparison

Credit Card vs. Debit Card vs. ATM card – Comparison
01 Aug

A credit card or debit card or ATM card is issued usually by a bank However some other service providers are also issuing credit cards nowadays Debit cards and ATM cards are directly linked to your bank account But a credit card is not linked to a bank account That means, debit cards are prepaid Credit cards and debit cards both are used to make payments to merchants or sellers for goods and services While an ATM card is only used to withdraw cash from ATMs So, a credit card or debit card can be used online or in POS machines, in shops and other places to pay Debit and credit cards offer multiple ways to access money without any need to carry cash or a checkbook around Debit cards are more like digitized versions of checkbooks They are linked to your bank account and money is withdrawn or debited from the account as soon as the transaction occurs

Credit cards are different they offer a line of credit or Loan that is interest free if the monthly credit card bill is paid on time But if you fail to pay the bill on time, there will be a fine or interest rate applied with the main payable sum! Instead of being connected to a personal bank account, a credit card is connected to the bank or financial institution that issued the card So, when you use a credit card the issuer or bank pays the merchant on behalf of you and you go into debt to the bank Debit cards and ATM cards can be used to withdraw cash from ATMs because they are linked to your bank account But on the other hand, usually a credit card cannot be used to withdraw cash because, yes you guessed it right! They are not linked to a bank account Then again, nowadays credit cards can actually be used to withdraw cash from ATMs, which is considered as cash in advance and those transactions are not free, they are chargeable

Nowadays, ATM cards are becoming rare day by day because an ATM card has only one job, which is withdrawing cash, and a debit card can serve that purpose So, the banks endorse debit cards more Okay, let's talk about EMIs now EMI is easily available with credit cards, but not with debit cards Then again, nowadays, EMI can be availed with debit cards as well but the availability varies from bank to bank and merchant to merchant Yearly charges and other service charges vary from bank to bank for credit cards and debit cards and many banks offer zero yearly charges Per transaction charges for debit cards are coming down day by day and mostly there are no such charges There are lots of payment network companies like Visa, MasterCard, Maestro, American Express, RuPay etc on the credit and debit cards but not on the ATM cards because ATM cards are not used to pay online or offline merchants or sellers But again, these kinds of cards are really very rare

The dedicated ATM cards that serve only one purpose are nowadays not endorsed by banks anymore The banks work in collaboration with the payment network companies to make the whole payment system going Last but not the least, a credit check is required to get a credit card The bank will check your credit history and maybe current financial status It is done from their end to make sure that you are well able to pay the money back after spending it with the credit card But a debit card doesn't require such credit checks because it is prepaid Hit the like button if you liked the video and don't forget to subscribe and hit the bell icon If you have any question or if you have anything to say just comment it down below Share the video, Maybe someone will find it useful Check the descriptions, you may find something useful there

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