Why are Credit Cards Safer than Debit Cards

You have to understand the reasoning behind credit and debit cards when debating why the former is safer than the latter. You may often ask yourself which one can be used for a safer financial transaction. This is when you need to understand the pros and cons of both the cards. 

Firstly, both the cards are not used for the same purposes.

Both of them rectangle-shaped cards made of plastics, that help you pay for a service or a product you have purchased. In the digital age, even small scale businesses have credit and debit card option for you. Generally, both of them look identical so many people believe that both of them are used for the same purpose and just for financial transactions.

Here is where they get it wrong. Credit cards are sometimes used to protect the customer from frauds. Still, there are some safety benefits you can get from using debit cards as well. Let’s look at the pros and cons so you can decide which card suits you better.

Difference between credit and debit cards :

Though both of them look similar, they do not serve the same purposes. You can’t perceive the function of a card based on its appearance. 

Credit cards are provided with a credit line. This means that there is a fixed amount you can borrow from the lender. The issuer pays the merchant for the purchases you have made and the amount in your name is deducted from the total sum.

Say, I have a credit line of around 50,000 and I make a transaction for 10,000, I will be left with 40,000 to borrow from my issuer.

In the case of Debit cards, there is no borrowing involved so you don’t have to borrow any amount of money from your issuer. You will be using the cash that you have in your bank.

Safety Issues Related to Debit Cards :

Even though both credit and debit cards are safe to use in India as there is an extra factor of authentication needed to confirm any transaction. Yet, withdrawing cash from your debit or credit card doesn’t require OTP validation. Here if your debit card is stolen along with your PIN, hackers can steal a large sum of money from your account.

On the flip side, if you take credit cards, there is a limit on the withdrawal. Swindlers can’t withdraw cash more than it’s predefined limit.

Conclusion :

You can indeed use both of these cards for financial purposes. Like credit cards, it aids you during emergency times. Debit cards are used to save the amount in your bank and then withdraw it wisely by understanding your expense limit.



Ashutosh Gupta

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