Plastic cards are a popular payment instrument. There are two types of plastic cards: credit and debit. There are a number of fundamental differences between them.
Distinguishing features of debit and credit cards
Credit and debit cards are visually the same. Both types act as a payment instrument; they can be used to pay for purchases in many trade and service companies. Most often they are issued in Visa and MasterCard payment systems.
Debit bank cards allow you to use only your own money. It is impossible to go negative on such a card. Whereas credit allow you to borrow money from a bank that provides tranches within the maximum credit limit. In fact, a credit card is the same loan, but revolving. Its advantage lies in the fact that when the debt is repaid, the credit limit becomes available again. At the same time, the borrower can spend funds without restrictions and is not obliged to report to the bank on the directions of using the money.
Of course, the bank does not provide money on a credit card free of charge, but receives a certain percentage for this. But for many such cards, a grace period is established, during which interest on the funds used is not charged.
Some banks offer special conditions for the accrual of interest on own funds and on a debit card. In this case, it can be perceived as a form of contribution.
The purpose of the credit card is non-cash payment. That is why banks set rather high commissions for cash withdrawals and set limits on cash withdrawals. There are no such restrictions on debit cards. The user can withdraw cash from ATMs without commissions, as well as pay for purchases in stores with a card.
Credit and debit card users at some banks can expect cash-back. When making non-cash purchases, part of the money spent will be returned to them on the card. It should be noted that this is an optional option and may not be present.
Features of the design of debit and credit cards
Differences between debit and credit cards are also manifested in the procedure for issuing them. Debit cards can be issued at the request of the users themselves or their employers for the transfer of salaries. In the latter case, the employer often assumes all the costs associated with issuing and using the card. Debit cards are often opened by students and pensioners to transfer scholarships and pensions to them, respectively.
Credit cards are opened only at the request of a citizen. And he is independently obliged to compensate for all the costs that are provided for by the banking program.
Debit cards are available to a wide range of citizens over the age of 18. Banks rarely refuse to issue a debit card. This can happen, for example, when a person is involved in a cash-out scheme. For registration, a passport and an application for a card issue are enough.
A credit card is more difficult to obtain. In most cases, banks require proof of income and a certain length of service. The list of requirements may vary depending on the bank. The requested documents, as a rule, include 2-NDFL, a passport, as well as additional documents (driving license, military ID, etc.). The cost of issuing and annual maintenance of a credit card is higher than that of a debit card.
Both cards can be issued both at a bank branch, and you can apply online.
