The term credit card and debit card are the most commonly used by people for making any kinds of payments. Both these cards make it to make any kind of purchases from stores or even online. Not just this, both the cards look almost identical with 16-digit number, expiration dates, CVV code and EMV chips. However, the usage of both these cards is different.
Debit cards: Debit card is issued by a bank on your current account or savings account. The debit card is directly linked to your bank. With the help of a debit card, customer can use only the amount of money present in the bank which means as any customer make a certain amount of payment, the amount will directly be debited from their account. Debit Cards generally do not levy a cash withdrawal fee, especially if you transact at your bank’s ATM. However, debit card do have daily limits on spends and cash withdrawals. Using a debit card will not help build any kind of credit score. Payment when done via debit card of certain banks do have cashbacks and discounts. Some debit cards do have low to nil charges. For a debit card, a minimum balance is required to be stored in the account depending on bank. Debit card which are salary accounts do not require minimum balance.
Credit cards: Banks and a couple of non-banks (or NBFCs) generally issue such credit cards. However, other approved entities can also issue these cards. Credit Cards are nothing but cards where customer benefit on buying now and paying later. When payments are made by Credit card, bank gives you credit for a certain period and customer must pay the bank for their purchase within the given due date. Banks give monthly credit limits, it can depend on the kind of card or even and your credit-worthiness. You can purchase goods and services at PoS terminals/e-commerce through credit cards. Credit cards can help you build a good credit score if the bills are paid on time. These cards can be used domestically as well internationally provided they are enabled for such use. While credit cards can also be used to withdraw cash from an ATM, you must not do so because you are usually charged a fee upfront based on the amount you withdraw. You can also transfer money to bank accounts, debit cards, other credit cards and prepaid cards within India, subject to agreed limits and conditions.