What is the difference between a debit card and credit card?
A debit card is one which is associated with your savings account. Purchases made using a debit card are deducted from your savings account. You must have funds in your savings account to honour the purchase you are making. Your statement will provide you with details of payments that have been processed using your debit card. A credit card is a card not associated with your savings account but a separate credit account with a pre-agreed spending limit. If you make a purchase with your card beyond the agreed spending limit the purchase you make will not normally be honoured. You must ensure you have sufficient funds available on your credit card account before making a purchase. Your statement will show details of all payments and transactions processed. This will be a separate statement to your other accounts, and it will have information such as closing balance, interest charged, repayment due date, minimum payment due and available credit.
When you take a credit card, there is no PIN number required. Furthermore, it is not a transaction done in real time: you authorize a specific amount of money, and that amount is put on hold at the credit card issuing bank. That transaction does not actually go through until a few days later. On the other hand, payments with a debit card are PIN-based transactions that happen in real time. Once the authorization has been approved, the money is immediately removed from the cardholder’s account.
