7 Reasons Credit Cards are Better Choice than Debit Cards

While both credit cards and debit cards have their own pros and cons, research suggests that the former’s market in India has been increasing significantly.

Since January 2018, transactions made through POS with credit cards and debit cards were almost the same. In July 2019, transactions done with credit cards surpassed that of debit cards.

While the total amount transacted through credit cards stood at Rs.59,600 crore, that of debit cards was around Rs.58,100 crore.

Hence, it is a clear indication that the demand for an online credit card is on the rise. And, that is owing to several reasons.

Reasons to Choose Credit Cards Over Debit Cards

The conflict of credit card vs debit card is inevitable as both these payment cards have their own share of merits. The primary difference between credit card and debit card is that the former one is the borrowed money that one uses to meet different financial requirements. On the contrary, the latter is an individuals’ own money that he/she uses.

However, credit cards encompass an array of benefits that keeps it ahead of other payment cards.

Following are some of the pointers that prove why credit cards are better than debit cards:

1. Aids in Improving Credit Score 

Individuals can use an online credit card to improve their credit score. They only have to use their credit card responsibly. One of the easiest ways to do so is paying bills within due dates. Also, cardholders must always pay the total amount due and keep the credit utilization under 30%.

2. Better Fraud Management 

Since credit cards come with pay later policy, customers get time to report a cybertheft before the due date. The issuer will resolve the matter accordingly, and perhaps cardholder will be exempted from paying for that unauthorized transaction.

3. Attractive Reward Points 

One of the reasons for the towering popularity of an online credit card is the offers and reward points against almost every transaction made through the card. These reward points are added to a cardholder’s account directly. On the other hand, a debit card does not come with such offers.

4. Instant Personal Loan 

Credit cards enable individuals to opt for a personal loan against the credit limit to meet immediate financial requirements.

The Bajaj Finserv RBL Bank SuperCard let cardholders avail an instant personal loan against the unutilized credit limit of the card with zero interest for up to 90 days.

The company also provides pre-approved offers that make the entire process to avail financing hassle-free. These offers are also available on other financial products like personal loans, business loans, etc. You can check your pre-approved offer by entering your name and phone number.

5. Apt for Foreign Trips 

With an online credit card, individuals can enjoy a hassle-free travel experience. It is also beneficial for overseas trips. By using credit cards, individual can make all the necessary payment even with zero additional charges in some cases.

6. Customized for Specific Needs 

Unlike debit cards, credit cards come with different variants for particular needs. For example, financial institutions offer products for frequent travellers, those who spend highly on fuel, moviegoers, online shoppers, etc.

7. Additional Offers 

Using an online credit card, you can enjoy some additional benefits and perks like travel miles, chargeback facility, and several others that debit cards do not cover.

These are some of the reasons why credit cards are better than debit cards. However, individuals need to choose an online credit card carefully to avoid any financial pitfall in future. They must specifically consider the different charges before applying.

Conclusion

In conclusion we can say that your credit card is like a loan. When you open a credit card, you’re approved for a certain line of credit. BTW which is also known as a credit limit, a line of credit is how much you can spend before your card will be maxed out and will be no longer be used for purchases.

On the other hand, your credit limit is based on your credit history and income; the stronger those are, more the trusts you and the higher your credit limit will be.

So Each and every month you’ll get a bill for the amount you spent throughout the month. Though you’re only required to cover the minimum payment by the due date, you’ll pay interest on whatever amount you remains in your credit card.

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About FinanceGAB

Ajeet Sharma is a financial blogger and I am blogging since 2017. Financegab is a personal blog dedicated to personal finance. The main aim of this blog to help people to make well-informed financial decisions.
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