DEBIT AND CREDIT CARDS

A.AYESHA SIDDIQUA
DEPT. OF B.COM BANKING
 DEBIT CARD

Also known as Bank Card or Check Card.

A debit card is a plastic card that provides an
alternative payment method to cash when making
purchases.
It can be called an electronic cheque, as the funds are
withdrawn directly from either the bank account, or
from the remaining balance on the card.
 CREDIT CARD

Credit cards allow you to 'buy goods now and pay

later' - called 'buying on credit'.
They aren't linked to your bank account.
If you don't repay your bill in full by the date shown
you're charged interest on the whole amount of the
bill for that month.
The rates of interest - indicated by the APR (annual
percentage rate) - is very high.
 DEBIT or CREDIT..?

A debit card uses the money you have and a credit

card uses the money you don't have.
"Debit cards" are linked directly to a checking
account whereas Credit cards are not.
The "debit" networks usually require that a Personal
Identification Number(PIN).
The "credit" networks require that purchases be
made in person and often allow cards to be charged
with only a signature, and/or picture ID.
 ADVANTAGES OF DEBIT CARDS

A consumer who is not credit worthy and may find it

difficult or impossible to obtain a credit card can
more easily obtain a debit card.
Use of a debit card is limited to the existing funds in
the account to which it is linked.
A debit card may be used to obtain cash from an
ATM or a PIN-based transaction at no extra charge,
other than a foreign ATM fee.
 DISADVANTAGES

Many banks are now charging non-sufficient funds

fees based upon pre-authorizations.
Many merchants mistakenly believe that amounts
owed can be "taken" from a customer's account after
a debit card (or number) has been presented,
without agreement as to date, payee name, amount
and currency, thus causing penalty fees for
overdrafts.
 DISADVANTAGES

Debit cards offer lower levels of security protection

than credit cards.
Laws protect the consumer from fraud much less
than with a credit card.