Benefits of Credit Cards, Dangers of Debit Cards

7th December 2021 0 By indiafreenotes


Easy approval

A credit card can be applied online as well as offline. The eligibility criteria are simple and involve only a few basic documents.

EMI payments

One of the best credit card features is that you can use the card to convert your high-end purchases into affordable EMIs effortlessly, which can be paid over a period of time.

Customised card limit

The credit card limit varies from one cardholder to another and is decided by the issuer based on the credit history and score. Generally, the better the score and history, the higher is the credit limit.

Loans during an emergency

Credit card facilities can also be used to avail a personal loan to address any emergencies that may arise.

Discounts and Offers

Undoubtedly, the best credit card perks are the discounts and offers that can be availed on a range of products ranging from accessories, electronics, clothes, etc.

ATM cash withdrawal

Another one of the top advantages of using a credit card is that, much like a debit card, it too can be used to withdraw cash from ATM. An interest and a fee might be charged for such transactions, though some issuers offer the benefit of no interest withdrawals too.


Reward points are also one of the top advantages of using a credit card. These reward points can be earned based on spends and credit card type, and can be later used to avail discounts, gift vouchers, etc.

Secure pay

This is a digital card that can be used to pay for a wide array of products and services and can be protected using multi-factor authentication and in-hand security features. It is, therefore, a secure means of transaction and reduces the dependency on cash.

Benefits of Credit Cards

Freedom from cash

The elimination of the need to carry cash around for purchasing items is definitely one of the top benefits of having a credit card. You can enter the card details on the website when you shop online or swipe the card at an offline store to complete your purchase.

Buy big-ticket items on credit

One of the best credit card benefits is the option to buy now and pay later. The principle allows you to make big purchases on borrowed credit so that your monthly budget does not take a hit. Also, once you have purchased the items, you can convert the cost of these items into low-cost EMIs which can be repaid over a period of time. This aspect of the credit card has revolutionised the entire shopping experience for the better.

Access to cashbacks, rewards, and offers

The most sought after credit card advantages are the special discounts, cash back or reward points that can be collected when making purchases using a credit card. There are special credit cards too that may be associated with specific retailers, shopping websites, travel websites, etc. In such cases, the rewards may vary accordingly. Points collected can also be used for making purchases in the future.

Accepted mode of payment worldwide

The fact that the credit card is the most commonly accepted mode of payment, worldwide, allows cardholders the opportunity to enjoy the benefits of using credit cards anywhere.

Cash withdrawals from ATM

In exchange for a nominal fee, credit cards allow customers to withdraw cash from the ATM to address emergencies.

Emergency payments

The credit card can come in handy for addressing expenses during emergencies, such as a medical emergency. This saves the worries and hassles of gathering funds to pay bills at a moment of crisis.

Credit score

The advantages of credit cards to customers does not entail only making purchases on credit. Instead, it extends to functioning as a means of improving your credit score. This credit score plays a critical role in deciding your creditworthiness and eligibility for loans. By paying your credit card bills on time, you can significantly improve your credit score and credit history.

Dangers of Debit Cards

Phantom charges

If you use a credit card at a hotel, the hotel takes an imprint when you check in, but doesn’t charge your card until you check out. It’s a far different story with a debit card. Generally, hotels will put a “Hold” on funds in your account for more than you’re spending. Yes, more. They hold the full amount of your stay, plus an estimated amount for “incidentals,” such as meals at the hotel restaurant and dipping into the mini-bar. This is not an actual charge the hold will come off your account at the end of your stay. But it affects the available balance in your checking account anyway and can lead to overdrafts.

Pay Now/Reimburse Later

If someone has fraudulently used your credit card, you don’t have to pay the charge. But when somebody has fraudulently used your debit card, the money comes directly out of your account in real time. That means you’re out the money while the bank does a leisurely examination of their records to investigate your fraud claim. Many consumers complaining to Privacy Rights Clearing House said they lost access to their funds for several weeks. In the meantime, they were caught short and unable to pay their bills, Givens said.

Loss Limits

Like credit cards, federal law limits your liability for fraudulent transactions on a debit card to Rs. 500/-. But that’s only if you notify your financial institution within two days of discovering the theft. If you’re a space cadet and don’t check your bank statements for a couple of months, you could lose everything.

Merchant disputes

The same problem affects merchant disputes. If you pay with a credit card when ordering something online, and that product comes damaged, broken or not at all, you can dispute the charge and stop payment with your credit card. If you used your debit card, the charge is paid when you made the order. By the time you find out the goods weren’t what was advertised, the merchant has your cash and you’re in the unenviable position of having to fight to get your money back.