The concept of plastic money has emerged vastly, such that both Credit and Debit the cards are accepted at the shops and online websites. Similarly, the money transfer can be done using both the cards. This has led to increasing the confusion between two cards, especially for them who don’t use one of them. When noticed, both the cards have different key features, designed aiming for various purposes especially in the Gulf countries. Reading further shall give you an idea of the fundamental difference between credit and debit cards.
Before moving to the differences, let’s have a look at the basics of both the cards.
A credit card is nothing but a plastic card that allows you to borrow some money up to a defined limit. The interest is charged for using the credit card as the bank provides you with the money whenever needed. It is like a short-term loan. There is always some interest-free period, during which, the borrowings can be settled without any extra charges.
Debit cards look like credit cards but possess different functions. Debit cards do not provide any loan facility if the amount of purchase is much higher than your account balance. But the convenience of the debit cards can be stated as you can use them wherever you want. Nowadays, almost all the banks have combined debit cards with AT*6M cards, which lets you withdraw the money from your account through the ATM, or you can swipe your card at the time of purchase, and the amount will be transferred directly. The debit cards can also be used for online transactions. A unique PIN is required to transfer money from your account.
Difference Between Credit and Debit Cards
Several differences between both the cards can be quoted such as-
- Credit cards are used for the purchase of large amounts such as the purchase of some expensive things such as TVs, refrigerators, etc. even if you don’t have enough balance in your account. Debit cards can be used to purchase the things using the amount which is already there in your bank account. No loan of any extra amount is provided in debit cards.
- Credit Cards are useful while travelling abroad or to the remote destination because carrying the cash with us can be dangerous. Debit cards have the advantage of the seamless use of purchasing things without withdrawing money.
- Most of the times, credit cards enable you to avail insurance on the purchase you make using the card. Debit cards do not provide any insurance on the purchases.
- Credit cards in Kuwait come with liabilities, and you need to pay interest on the purchases if you fail to repay within an interest-free period. Debit cards do not possess any charges.
Considering the situation and your habit of spending, when in Kuwait or the middle-east, always choose the suitable one between credit and debit cards.