what is credit card

What is Credit Card – Debit Card and ATM Card – Complete Tutorial

What is Credit Card, Debit Card and ATM Card, how to apply online, differences between them I am going to explain you in simple terms.

Today everybody has a chip based card in India whether is it a credit card or a debit card. Do you know the difference between them, let me tell you the things in simple way. First let’s start from the basics

Credit card is nothing but the money you are going to borrow money from financial institutions for a certain period of time(It depends on the card issuer, it will be 30 days around decided by the institution however you get grace period of around 20 days to pay money back) for shopping or to buy the things.

what is credit card

Within the stipulated time suppose the bank\financial institution you will have to pay full money, otherwise they will charge you interest rate on the money you borrowed and it will be very large.

Credit card are generally limit based meaning just for example if you salary is around Rs 25000 then you can get spending limit up to Rs 75000, this depends on your salary(Along with your CIBIL score) and the bank who decides your credit limit.

Many credit cards now a days are provided as free for lifetime and many cards are chargeable over the year, now it depends on you with which you want to go for it as the card which will be having a yearly fees will be having more benefits.

what is credit card

You cannot spend more than that, if you want to increase the limit you may have to contact bank.

Now days credit card providing banks provide you EMI option as well to shop when you don’t have money in bulk.

The credit payments systems are handled by VISA\MASESTRO\Master Card\Rupay\Amex etc, so the credit card is provide with these systems are written over them.

When you purchase the things through credit card you get reward points which if you accumulate can be used to purchase items shown as rewards program on your banks site or even you can adjust while doing payment online.

what is credit card

However some banks provide you cards with having limit set as auto meaning it will increase over the period of time depends on your card usage.

However on other hand Debit Card is the card which is your own savings bank account money and is provided by your bank, whatever you have it in your bank account you can do anything with that.

ATM card is nothing but it’s a debit card, so you can call debit card as ATM card.

Now a days all cards are chip based meaning when you will be using them you will have to enter pin.

Advice to use Credit Card

1. Pay off your bill within time (Do not opt for min due as you will have to give a good amount of interest along with the money you have used of the card)
2. Never skip a payment
3. Use the card for actual needs and try to avoid taking EMI option(Until its required)
4. Always try to opt for credit card without any fees
5. Use reward points
6. Protect your card from fraud
7. It’s good to opt for VISA cards as they are widely accepted in the world
8. Never give CVV pin to anybody, if possible erase it from your card

Now a days approximately all banks provide you the facility to apply for credit card only and the payments of card you can do online using net banking from any bank.

what is credit card

Some cards also provide facility to pay the bill of another credit card example SBI cards etc.

SBI online credit card apply page

To compare the credit cards before opting for it there is a good site mentioned below which not only compares the card but you can directly apply for the card from there.

You can check your CIBIL score easily

Some Banks\Financial institutions also provide accidental insurance on your card.

Please watch the video completely to understand properly. If you like my video please make me happy by sharing it and subscribing my youtube channel.


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