Card payment is the most popular among the many electronic payment systems in vogue. There are two(2) main types of payment cards; CREDIT CARDS and DEBIT CARDS. These cards can be used for many monetary transactions example over an ATM, POS, internet transactions, amongst others.
Many people still do not know the difference or similarity between the two cards. But chill, grab a bottle of wine let me break it down for you. It is not as mysterious as you think as i am going to be as precise and concise as possible.
CREDIT CARD allows the holder to make purchases on credit, while the DEBIT CARD requires the holder to have some amount of money in the account to be able to transact with the card. As the name suggests, an amount is debited from the card holder’s account as soon as the card is used. This is opposed to a credit card where the card holder where the card holder does not need to have the amount he or she want to spend.
As long as the amount is within the ‘credit limit’ of the card, the transaction will be carried through and it is expected of the holder to return/refund the used money to the card company; either in installments or a one-time payment.
WHAT IS A DEBIT CARD?
Debit cards offer the convenience of a credit card but works differently. Debit cards draw money directly from your account whenever you makes a transaction with it. This is done by placing a hold on the amount of purchase. Then the merchant sends in the transaction to their bank and it is transferred to the merchant’s account. It this may take a few days to happen and the hold may drop off before the transaction goes through. So it is important you keep a running balance of your checking account to be sure you do not overdraw your account.
FEATURES OF A DEBIT CARD
- It is tied directly to your bank account.
- It can also serve the purpose of a credit card.
- It is the most used card issued by your bank after opening a bank account.
- It requires the use of PIN or One-Time-Password to complete transactions.
- It always has a VISA, MASTERCARD, or other financial service company logo on it.
The front includes the card number and the expiration date while the back contains a 3-digit-code customer service number. It also includes the signature bar, the card verification value and some of the issuing bank logos.
WHAT IS A CREDIT CARD?
A credit card is a card that allows you to borrow money in small amounts at local merchants. After using the card for basic transactions, the card company then charges you interest on your purchases. However, there is generally a grace period of approximately 30 days before interest is charged if you do not carry your balance over from month to month.
FEATURES OF A CREDIT CARD
- It is a line of credit you can access with your card.
- You must sign on these purchases.
- Interest is paid on purchases made if not refunded in 30 days.
- Pin is not really required when making a transaction.
PROTECTING YOUR DEBIT AND CREDIT CARDS
If your credit or debit card information has been compromised or stolen, contact your bank immediately.
Also monitor your credit report to make sure that your identity was not stolen. it is very important you check your account statements each month to be sure you can identify all charges.
the banks actually limit the duration you can report a fraudulent charge on your account. they will freeze the account and issue you a new card when you report that the card has been stolen or about a fraudulent transaction.
Hope you learnt good now.
Now send me my beer……..lol