Credit and Debit Cards

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August 16, 2005 15:28 Sina Finance

Credit Card

If you have a credit card, you can use the pre-approved credit limit for consumption. A credit card issuer can be a bank, retailer, or other credit institution. Some card issuers charge an annual fee to subsidize the cost of service, while others waive it. At present, domestic credit card issuers are basically major banks.

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After using a credit card to make purchases, you need to return the money you spent within the interest-free period; after the interest-free period, you need to pay back the principal with interest in one lump sum or in installments Repayment. This is often called a revolving credit, meaning you pay interest on the revolving credit.

Different credit cards have different interest rates, annual fees and repayment terms.

Credit itself has its pros and cons. Knowing your responsibility clearly and using it wisely will make the most of it and minimize the negative impacts.

Advantages of credit cards: You can buy the goods and services you need immediately. You don’t need to carry cash. It is more convenient and easier to accept than checks. You have detailed transaction records and you can enjoy points discounts and other benefits

Disadvantages of credit cards If you have to bear interest, the cost of shopping will be higher. Service fees are generally required. If you do not carefully control your monthly expenses, you may fall into financial crisis. May increase the chance of "impulse shopping"

Debit Cards

Debit cards are becoming increasingly common and can easily replace cash and checks for purchases. Think about the last time you made a purchase. Are you going to buy food? Rent a DVD? Or dining out? In addition to traditional payment methods such as cash, checks, and credit cards, you may also have the opportunity to use a debit card.

Debit cards have gradually become the most popular payment card in recent years. Billions of debit cards are used around the world. A debit card is an ATM card issued by your card issuer and has more features. If the debit card is only available to local merchants, it will usually be stamped with the logo of the card issuer and the processing system it applies to.

Internationally accepted debit cards have the same appearance as credit cards, and have the logo of the international payment card institution printed on the lower right corner. It is available at all points of sale that accept credit cards. The only difference is that when you use a debit card, the amount is automatically deducted from your bank account rather than being added to your credit limit.

The difference between credit cards and debit cards

Choosing when to use a debit card or when to use a credit card should not be taken lightly. Credit cards are a "buy now, pay later" tool, while debit cards are a "buy now, pay now" tool. Both cards can play an important role in your financial plan.

How to use a debit card?

Debit cards are generally linked directly to your bank account, such as a checking account. When you use your debit card to withdraw cash or make a purchase, the amount is deducted directly from your bank account.

A credit card is an unsecured loan provided by a financial institution to you to facilitate your payment activities. Using a credit card means that even if you don't pay off your balance every month, you can still pay it back in installments with interest. PIN Debit Card

You will need to enter your PIN when making purchases. PIN-based debit cards are only applicable to merchants that have installed online POS machines. This terminal equipment provides a device for entering personal passwords. Signature Debit Card

Like a credit card, you need to sign the receipt when you make a purchase. Signature debit cards are available at merchants with online or offline POS machines installed.

Some debit cards are only suitable for password operations, while others are suitable for both password and signature operations.

Signature debit cards are more flexible and can be used even at merchants that do not have password POS machines installed.

Please check with your financial institution for the type of debit card issued.

Regardless of the type of debit card, the amount will be automatically deducted from your account when you make a purchase.

Both debit cards require a personal PIN to withdraw money at an ATM (automated teller) machine. The bank will give you an initial password when issuing the card.

Why are debit cards so popular?

All you need is a bank account. Debit cards are committed to providing users with the most convenient consumption mode and are an ideal substitute for cash and checks. All you need is a bank account to apply for a debit card.

In the Asia-Pacific region, an estimated 500 million people with bank accounts are eligible to apply for debit cards, while only 100 million are eligible to apply for credit cards.

Debit cards are an effective financial management tool

More and more credit card holders are also using debit cards to manage their daily expenses more effectively. They will use debit cards for daily consumption and payment of bills, such as food, water, electricity, gas and other miscellaneous expenses, monthly fees and other small expenses; as for larger consumption that requires installment payment or travel, they usually Use a credit card.

Debit card holders can only spend money in their bank account, which is especially suitable for people who want to effectively control their spending. Young people, people who are temporarily not eligible to apply for credit cards, or people who are adjusting their financial situation should use debit cards as their own financial management tools.

Characteristics of debit cards

Ease of use and popularity: Due to the ease of use and wide popularity of debit cards, debit cards are also the most commonly used payment in electronic trade. One of the tools. Signature debit cards from some of the world's leading brands are accepted at more than 20 million points of sale worldwide. Ease of use is one reason why debit cards are becoming increasingly popular. Not only does a debit card save you the trouble of carrying cash, it's also easy to use, makes payments fast, and the monthly statement (or statement) clearly shows all transaction records.

Safe and reliable: Debit cards have the same security as credit cards. If you lose your debit card or suspect it has been stolen, you should report the loss to your bank immediately to prevent others from using it and reduce losses. Remember: Although the card issuer provides you with consumption protection, it does not mean that you can ignore your debit card; debit cards are like money in a bank account and should be properly kept.

Reference:/money/bank/bank_yhzs/20050816/15281891449.shtml