When debating on the topic of why credit cards are safer than debit cards, you have to understand the logic behind both of them. There are often that you may ask yourself what type of card can be readily used for a safer purchase, and this is when you need to understand their benefits and the uses of both the cards. Some people end up confusing themselves since they cannot get to the point of which one to use for their day to day transactions.
First of all, Credit and debit cards are not the same cards that you can use
Each is a plastic rectangle-shaped card which helps you to pay for the service or the product that you have bought for yourself. In the modern age of digitalization, around every place have a credit or a debit card facility option here for you. Typically they both look the same, so some people undertake for the self-belief that both cards have the same purpose, and they are used for mere transactions.
Well, here so where they can go wrong. Credit cards are sometimes used, which can be heightened for the consumer to stay protected from the frauds. But there are some of the personal safety advantages that you can get from the usage of the debit cards as well. So with the help of this article, you will know which card you can use for a safer online or offline transactions.
The primary difference between credit and debit cards:
Although both of them will look alike in front of you, the credit and the debit cards have different purposes to them. You cannot undertake the function of both the cards based on their appearance. So here is the following thing which you have to understand.
Credit cards are equipped with a credit line:
This basically means that there is a fixed amount of money which you can try it borrow from the lender. After every charge that you make, the issuer pays the merchant the expected amount, and the amount that you can hire to your name is reduced from the all total sum.
So if you have a credit line of around 20,000 and you have got about 5,000, you will have 15,000 left to borrow from your issuer. The more you use your card, the less amount you will be left with from your issuer.
After the payment due period, there is an interest that is charged onto the 5,000 that you have applied for yourself. So unless you have paid in for the 5,000, the interest fee for the grace period will be charged on that basis. If you pay less for this month, then the amount will be rolled to the consecutive month. And if you have paid it al-together, then your amount will be charged back to 20,000. This is how a regular credit card works.
For the debit card, there is no borrowing involved here:
This means that you don’t have to borrow any sum of money from your issuer to get to a transaction. So when you are using a debit card, you will be tapping into the fund of cash that you have in your bank.
After you have made the purchase there, the money which is deducted will be transferred from your account to the bank account of the merchant. This way, the amount will be paid to the merchant, and it will be deducted from your source.
Now there are a lot of banks out there who will charge you a negligible amount of interest on the purchase that you make. So with the help of your debit card, you will know how much amount is really in your bank. You can even add to it by checking it anytime that you want.
Why Credit Cards Are Safer Than Debit Cards?
Safety against frauds for Debit and Credit Cards
In India, both credit and debit cards are subjectively safes to use as there is an additional factor of authentication required to validate any transaction. For making transactions, you receive OTP on your registered phone number to confirm the transaction. Therefore, until and unless your cards and phone number are both hacked/stolen together, it is very difficult to make fraud online transactions.
However, withdrawing money from your debit card or credit card from an ATM doesn’t require OTP validation. And here, if your debit card is stolen along with your PIN, the fraudsters can withdraw a huge amount if you have got a lot of money in your bank account. This may generally happen if you are not aware of the transactions i.e. when your active phone number is different than the registered number. Here, you do not receive the transaction alerts from the bank via messages. Similar is the case when you do not care to read the transaction messages sent from your bank and hence do not block your card immediately in case of fraud or stolen.
On the other hand, if we look into the credit cards, there’s a limit on the withdrawal and it doesn’t depend on how much money you have got in your bank account. The fraudsters cannot withdraw cash more than this predefined limit.
Further, a major drawback in the case of fraud on a debit card is that you lose the amount from your bank account. Even if you raise a complaint to the bank, it may take months for the bank to refund that amount. This is because they need to verify and confirm the fraud activity. They may ask you if you’ve shared the Pin/OTP with any of your friends/colleagues etc. In the case of ATM transactions, getting the CCTV footage and verifying that the person wasn’t you is definitely not a fast process. And throughout this verification process, all you can do is to wait patiently to get back your money.
On the other hand, when the same happens against a credit card, you can raise a complaint and get appropriate reversals before the next credit card billing cycle. Moreover, as this money never belonged to you, it won’t hurt you economically and even if the investigation process goes for weeks, you can remain calm. Overall, in terms of fraud protection, we may conclude than credit cards are safer than debit cards.
Credit And Debit Card Usage:
When you are using debit cards, you might check to see that they are not user or consumer-friendly over here, but you can use them for compelling other reasons which are presented.
First of all, if you don’t have an overwhelming debt to your name, then debit cards are the ones for you. By focussing on the expenses that you make for yourself with the use of your debit card, you can solve the financial crisis that you face. Debit cards let you use the amount that you have inside your bank and not more than that. If you apply for the amount which is over in limit, then it will be declined from the source.
Credit cards usage
Coming to the usage of the credit cards, they have a user-friendly base, and you can use them anytime by ensuring the right and even your safety as well. There are some clear, substantial advantages of using them. For example, if you want to go out for shopping then take your credit card with you. It is a preferred instrument since it helps you to have your way.
Plus, the internet trolls who are sitting every right now and then won’t be able to hack into your account and see how much amount you have left. Besides, when you are going in out for traveling, then credit cards are the key or the prime thing to use. They can be used for checking accounts, and you can always fall short of cash when you are outside. So credit cards are there to save you from the hustle or the worry that you might face by yourself.
Well, we all know that you can use both these cards for your transaction habits. Like credit cards, it helps you to run the funds when you are in need of an emergency. Debit cards are used for you to save the fund in your bank and then use it carefully by understanding your expenditure limit. Certain people can get into a credit card debt if they have not paid out their expenses or the issues that they have made from their lender. In other words, if you want to never fall into a huge trap of expenses and debts surrounding you from all around, then debit cards are a go-to option for you.
Regarding consumer protection, definitely credit cards are safer than debit cards. From fraud transactions to creeps looking into your bank account, all can be lessened by using credit cards. Moreover, there are some of the awesome advantages that you can even get for yourself by the usage of these cards like cashback and rewards.
Final advise, having both at your disposal is an excellent technique, as well. This way, you can use the cards accordingly to the given scenario that you please to have.