Home Finance The Perks and Benefits of a Credit Card Over a Debit Card

The Perks and Benefits of a Credit Card Over a Debit Card

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India has been predominantly a debit card market. However, individuals now prefer credit cards more for transactions. A recent survey has portrayed how the total amount of credit card transactions through the POS terminals in July 2019 surpassed that of debit cards.

This survey shows that the total amount of credit card transactions through POS terminals was more than Rs.59,600 crore. The same for the debit card was around Rs.58,100 crore. The survey further states how this gap started reducing from 2016, and in 2019 credit cards have finally overtaken debit cards in terms of the total spending.

There are several reasons behind this sudden emergence of credit cards. To understand this better, individuals need to comprehend the difference between a credit card and debit card first.

Top 5 differences between credit and debit cards

  • Rewards and benefits

Both debit and credit cards offer benefits to users. However, when compared head-to-head, credit cards are more lucrative. There are a myriad of different advantages associated with this particular payment card.

For instance, cardholders get joining rewards, and after that, they get reward points with every transaction. Users can later redeem these points to avail discounts as well as purchase several goods and services.

Other than reward points, credit cards provide a host of other benefits like complimentary access to airport lounges, free movie tickets, milestone bonuses, and more. These are the primary reasons why credit cards are considered better than debit cards.

  • Source of funds and spending limit

The other point of difference between debit and credit cards is their access to funds. In the case of credit cards, it is technically a short-term loan that a financial institution offers to its customers, which they need to repay within a given period. Credit card issuers often revise this credit limit annually; cardholders can also apply for an increase in their limit based on their usage.

On the other hand, debit cards are linked with a savings account; cardholders can only spend the money they have in that account.

  • Expense tracking

Debits cards do not generate any monthly expense report; hence, it is difficult to keep track of expenses. 

Alternatively, a credit card mandatory generates a monthly statement, which helps cardholders to keep a tab on their expenses. 

  • Liability factor

In case of theft, loss or unauthorized usage of debit cards, the liability is solely on the cardholder. Whereas in case of a credit card fraud, the liability does not fall on the user; it lies on the issuer.

Apart from that, credit card issuers often have affiliation with various retailers. Hence, when a credit card user makes a purchase from that company, they receive accelerated reward points and other benefits.

Individuals who are looking for a credit card that offers attractive benefits, high security, etc. can opt for SuperCard. This card provides benefits like 50 days of interest-free ATM cash withdrawal facility, emergency personal loan without any interest for up to 90 days, and more.

Additionally, the company also provides pre-approved offers for its customers. These offers aim to make the application process to avail financing short and less time-consuming. Pre-approved offers are available on financial products like credit cards, personal loans, business loans, etc. Applicants can check their pre-approved offers by providing their essential contact details.

Even though both of them are mere payment cards, they have contrasting working principles. Therefore, it is essential for an individual to understand the difference between debit and credit cards before applying. Being aware of it will help individuals to choose the right credit card for themselves.

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