Has the banking organization rejected your credit card application? Such a thing can happen because of a lack of regular income or too many credit card applications, etc. If yes, no need to lose hope. You can still apply for a credit card under your name, provided you have accumulated a tidy sum in savings. A Fixed Deposit backs this kind of credit card.
We believe each of you already has a decent stack of plastic cards. Some of them could be discount cards for stores and at least a couple of bank cards. Enough people already own some type of bank debit card, which cannot be said about credit cards. In this article, we will figure out how they differ and what sorts of possibilities open up to the card owners.
Know a bit about debit card first
A bank debit card works as a personal account in which the depositor’s money is stored. For instance, salaries are usually received in such accounts, and you can withdraw a limited amount depending on the limit of the funds available on the account. You are also free to deposit money and withdraw cash using these cards. In addition, you can use them to pay for purchases on the Internet and in stores that accept online payment. And also transfer funds to other banks via SMS, mobile application, or personal account on the banking site.
You are free to make purchases and withdraw cash from ATMs or the bank itself using a credit card. However, simultaneously, such a card also provides more financial freedom to its owner: it allows you to travel worldwide, procure desired things and gifts even when you do not have your own money. How is such a miracle possible? At the expense of the amount lent to you by the bank.
This is the first and foremost thing that makes a debit card different from a credit card. The debit card only holds the money of its owner. Whereas, on credit, in addition to its funds, there is a certain amount allocated by the bank in debt for a specific period. A credit limit limits the actual money you can withdraw. When the part or all of the debt is paid back, the credit limit gets restored, which can be used again depending on the owner’s choice.
How to apply for FD Card deposits?
You can also apply for a credit card by opening a fixed deposit account from the comfort of your home. It will allow you to enjoy both credit cards and receive good interest. Various banks provide a high-interest rate on fixed deposits accounts, for example, axis bank fd interest rates.
Moreover, the credit card may also include a grace period without interest. This suggests that you will be able to utilize the available limit for a specific number of days without paying any interest.
Are there any other differences between credit and debit cards?
Cash withdrawal fee: By default, generally, all the banks deduct a commission for withdrawing cash from a credit card, even from using their “native” ATM. Such sort of thing does not apply to debit cards.
Payment for the provision of credit funds: When you own a debit card, you only need to pay an annual service charge. With purchases, an additional payment is usually added – a monthly percentage of the amount spent. However, these charges are only applicable when the debt is not completely repaid during the grace period.
Owner’s age and documents needed
A debit card can be easily issued, even for a child. This will make it easier to control a child’s daily expenses and manage limits using Internet banking.
For such things, Indian banks have created debit cards, especially for children from 6 to 17 years old. If the child is from 6 to 14 years old, the card is issued in the parent’s name with a withdrawal limit. If the child is between 14 and 17 years old, the card may remain additional to the parent or become the primary one for his own account.For registration, in addition to the birth certificate, the written consent of one of the parents becomes necessary.
The age limit for acquiring a credit card is higher – 23 years old, or 21 years old if the client receives a salary in a bank account.
Cashback and interest on the balance
By making purchases using a debit or credit card, the client can receive additional rewards: cashback (refund of part of the money spent), miles of partner certificates.
Some debit cards allow their holders the right to go beyond the zero balance in a specific amount. The bank is responsible for setting the loan amount, and the repayment grace period is generally no more than two or three months. Often, salary debit cards have an overdraft, and the debt is automatically paid after receiving the salary.
Generally, credit cards do not have an overdraft option.
How to visually distinguish a debit card from a credit card?
From the looks of it, debit and credit cards are the same. The design element of the plastic carrier is based on the general rules for the registration of a specific financial and credit institution. In addition, it also contains the bank’s logo, card number, information about the owner, validity period and code of the issuing unit on the front side, CVV code and holder’s signature area on the back.
Banks are free to use various background colors for different levels of plastic. For example, a gold background for the Gold service package. However, it is challenging to tell if it is a credit card or debit card by the color – premium service is available in all sorts of products.
Which card is better to choose?
The primary task is to make settlement transactions, make transfers, receive salary funds, that’s it, comfortably manage your hard-earned money, then you are required to issue a debit card.
For selecting a comfortable product, you need to think about what additional advantages, in addition to the primary one – payment, the card will function. For instance:
- What kind of amount is usually kept in the account?
- Are there constant expenses at a particular outlet?
- How actively do you travel?
If the primary task is to receive additional funding, you definitely must select a credit card. To keep costs down:
- Select a card with a dependable grace period;
- Check out the tariffs for additional services;
- As a responsible car owner, you must understand the “reporting period” and “billing period”.