Debit Card Processing

What is Debit Card

A debit card is a plastic card issued by the banks to their clients for access to their accounts for electronic payments on the purchases they make from the market. It is an alternate to carry cash and more beneficial is that the exact amount of amount is debited from the account for the purchases made. It facilitates the client to go to the bank to draw the cash and you can make the payment in case of any shortages right at that moment. Debit card is issued against your account. There are no interest charges on the purchases made through it. This is basic debit card processing.

What is Credit Card

A credit card is again a plastic card issued by the banks or financial companies to their clients for borrowing money for instant payments and is usually restricted to a certain limit. The bank gets interest on the purchases made through credit card. These loans are short termed. Mostly the amount spent is required to be paid back within a month or in certain cases after 45 days and then interest is charged from the clients. This type of borrowing is on pre-determined terms and conditions.

Difference between Credit and Debit Cards Processing

Following are some of the major differences:

·         The word debit means subtract, therefore, debit card processing means payments from your account and is an alternate to cash, whereas, credit card is a form of short termed borrowed money from a bank and the money is not debited from your account.

·         The payments of credit card are paid back in full or in parts on receipt of monthly bills against your purchases. The payments of debit card are deducted from your account in full instantly.

·         There is no interest on the payments made through debit card, whereas, you have to pay the interest if purchases are made through credit card and not repaid after certain pre-decided time.

·         Debit card can be used as ATM card, whereas, credit card cannot be used for this purpose.

·         Debit card cannot be used to make overpayments if you do not have any balance in your account.

·         There are hidden charges in the repayments of credit cards, whereas, in case of debit card there are no hidden charges.

Why to have Debit Card

Following are some the benefits of debit cards:

·         No need to carry cash.

·         No need to go to bank to draw cash.

·         Can be used as ATM card as well.

·         No burden of loan and additional interest charges on the holder of this card.

·         Easy to obtain i.e. without any sureties.

Summary

Debit cards are useful in today’s busy and overscheduled world where time is money and you do not want to waste it. Debit card processing is easy and simple. The only thing you need to keep in mind is to have sufficient funds in your account and it will protect you from loan and over burdening.