2006-09-19 23:59:55 · 32 answers · asked by timi 1 in Business & Finance ➔ Credit
A debit card automatically deducts the money from your account. A credit card will wait and compile all the charges for one month and then send you a lump bill for all expenses at one time. There is also an interest charge associated with credit cards.
2006-09-20 00:03:01 · answer #1 · answered by Mariposa 7 · 0⤊ 0⤋
A debit card is used like a credit card, except that it is used more like a check, in that it takes the funds from your account, usually a checking account. This is why they ask if you want to receive cash back. A debit card inquires no finance charge. Usually, you have to enter a PIN number, much like using an ATM. Also, you can use it like a credit card, which is why most have a Visa logo, and you will have to sign like a credit purchase, but it still does not build interest.
A credit card is issued by an institution, like a bank, but you are borrowing money from them that contains a finance charge. This is why they do a credit check, and depending on several factors, such as credit score and annual income, you have a set limit to what you can spend. Some credit card are secured, which means you have to pay money to the outfit, and this becomes your availible limit. A nice advantage to a credit card is you can spend money you might not have at the time, although you will end up paying back more money, sometimes way more, depending on the APR of the card, which is usually somewhere around 11 to 19%. Credit cards require you to either sign, or enter a zip code from the billing address, or sometimes you don't have to do anything.
2006-09-20 00:30:17 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Very correct answers. I just want to explain a couple things.
1)As mentioned before credit cards are used to spend borrowed money or money on credit, debit cards are used to spend money in a checking account.
2)When given the option a debit card can be run as a credit, OK what does this mean? Well, you sign a receipt rather than enter your pin and it goes through a different system. Charges on credit a run through an authorization system, they reserve the money and later, usually 2-3, the charge clears the account. When run as a debit or point of sale the charge goes through the same system as an ATM, therefore the money should come out of the account immediately.
Other info: Be careful how you use this, I don't want it to hurt you. If you have say 200.00 in your account and you run your debit card as a credit but it doesn't work you can run it as a debit and it should work. The problem is that you likely have outstanding or pending charges that will be coming through shortly.
Hope that answers your question.
2006-09-20 13:54:05 · answer #3 · answered by Bob 2 · 0⤊ 0⤋
All these answers are correct however if you have a debit card from your bank with the mc/visa logo on it and you go to a store and it ask you on the pos (point of sale) terminal debit or credit. Well for debit you have to enter a pin number and have the option for cash back..with credit of course, no pin (possibly identification could be asked for) and you must sign for the purchase (most of the time). The debit transaction stays on your account until the item posts to your checking account. The credit sometimes drops off as pending charges (authorizations) but soon posts thereafter. This is only if you were not issued a revolving credit line with your card and if you were not issued an overdraft protection with a credit line.
2006-09-20 01:14:10 · answer #4 · answered by nicknamegone 1 · 0⤊ 0⤋
Debit and Credit cards are given by a bank or any other financial institution. The difference between the two is that debit card can be used if one has money in his account while credit card can be used even if one doesn't have money in his account. A limit is set for each and every credit card holder depending upon his or parents/gaurdians profile(it includes the salary one gets,his/her financial position and background).For example any person 'X' may have a limit set to Rs.20,000 whereas for some other person 'Z' it may be Rs.50,000. This money has to be paid by him after sometime when he receives a bill from the bank.
2006-09-20 00:23:34 · answer #5 · answered by gagan k 1 · 0⤊ 0⤋
With a Debit card you need money in the bank to clear the funds immediately, with a Credit card you dont, you have credit of a set level that will be paid over a period of time.
2006-09-20 00:02:44 · answer #6 · answered by brianthesnailuk2002 6 · 0⤊ 0⤋
Debit card you are spending money you have, credit card, you are spending money that the bank is lending you. You have to pay back at least the minimum payment on a credit card every month.
2006-09-20 00:07:24 · answer #7 · answered by helen g 3 · 0⤊ 0⤋
A debit card will debit the amount you have spent directly from your current account.
With a credit card the balance will be added to your debt outstanding on that card, you need to repay your debt in monthly payments, usually a minimum of 2.5% of the outstanding balance, so if you owe £1000 your minimum payment will be £25. Interest is also added to the balance monthly.
Obviously if you keep spending and only repay the minimum each month it won't be long before you owe them a lot of money.
2006-09-20 00:05:21 · answer #8 · answered by RRM 4 · 0⤊ 0⤋
A debit card takes money that is yours straight from your account where as a credit card takes the borrowed money from an account and you have to then pay it back.
2006-09-20 00:02:15 · answer #9 · answered by rockin mermaid 2 · 0⤊ 0⤋
A debit card is your money being debited from your bank, whereas as credit card is you getting credit for the money and paying it back
2006-09-20 00:02:07 · answer #10 · answered by poli_b2001 5 · 0⤊ 0⤋