Credit card vs. Debit card: Which one suits you best?

Although the banking system has taken over the world economy in its grasp, confusions yet remain regarding credit and debit cards. Many still feel bamboozled while selecting the correct mode of ‘cashless transaction.’ For that reason, the argy-bargy of credit card vs. debit card never ends. 

A debit card is generally linked to your savings account. No matter the bank, debit card will always deduct your hard earned cash through that selected account. This also means, you cannot withdraw more than what you have in your account via debit cards.

Contrarily, credit cards are linked to the financial institution offering you a line of credit. This refers to a certain amount of cash that can be withdrawn from the card, even if the account is echoing louder than an empty canyon. However, endless borrowing is checked by the institute and the borrower must pay back the amount within a fixed period to avoid unnecessary interest.  

Credit cards may extend the interest-free period up to 50 days. After that, the account holder must pay extra as interest. This is generally avoided by the office employees as they can pay back the borrowed amount as soon as they get paid. However, debit cards will never charge you interest as you are spending your own money and not injecting temporary capital from some unknown domain!

I would definitely add a preemptive advisory notice here, credit card bills are massive. Annual charges, higher costs, occasional interests and probably stealth-mode fees - may hit you like a truck at the end of the year. 

On the far side, debit cards are like your guardian angel, assisting you to maneuver around expensive decisions which might accidentally make you a victim of banking conglomerates. 

As you already guessed it, credit cards will trigger higher fees and interest while withdrawing cash from the ATMs. Debit cards holders, however, are often forgotten by the bank officials and they are charged not a single dime, if you use your own bank’s ATM booth. 

Typically, debits cards are preferred by the Bangladeshi users to avoid unavoidable debt or interest. Nevertheless, this comes with a massive structural hazard. Credit card fraudulence is bank’s headache, but if debit card is compromised, the scammer is scamming your money in real-time.

Moreover, debit cards do not have the feature of dual-currency, meaning you are going to be deprived of that Netflix show you thought you would share a screen with that one ‘darling.’

Choose debit, if you want zero debt risk, domestic transactions and simplicity. Be extra cautious about scammers. 

Choose credit, if you want to pay extra and transfer the entire headache to the banking authorities. Precautions though, reimburse your borrowed capital on time!