Do you know difference between Debit Card, Credit Card and Prepaid Card? Check below...

Some of the things you should know about the three cards which come across every day, i.e, Debit Card, Credit Card and Prepaid Card.

Do you know difference between Debit Card, Credit Card and Prepaid Card? Check below...
Do you know difference between Debit Card, Credit Card and Prepaid Card?

Some of the things you should know about the three cards which come across every day, i.e, Debit Card, Credit Card and Prepaid Card.

1. Debit cards: Debit cards are linked to your bank account and are the payment cards. Debit Card works on the simple formula of 'USE NOW, PAY NOW '.

However, When you use a debit card it automatically withdraws money from the linked bank account and it combines the functions of ATM cards and checks. So, Whenever you pay with a debit card, the money is immediately deducted from your savings account.

Meanwhile, in this process of payment or Transaction there is no borrowing or repayment involved in this process because you can are directly accessing your own account and money where the transactions will only require you to enter your Personal Identification Number (PIN) to authorize the transaction. 

Its like you can only be able to spend the money available in your bank account through your Debit card.

2. Credit cards: Credit cards work on the formula of an interest-free loan offer all you need is to pay your monthly credit card bill on time monthly. A credit card works on the formula of 'USE NOW PAY LATER'. 

How does it work?
When you purchase or buy any stuff using Credit card the bank whose credit card you have pays the bill on your behalf and you later on you pay the money back monthly as per your use 

3. Prepaid cards: Prepaid cards are also a kind of payment cards where money deposited in advance by you or someone else. However, the Prepaid card works on the formula of 'PAY NOW, USE LATER'.

Meanwhile, These cards can be issued by a bank or a non-bank institution. You can use these cards to buy things with the money available in your prepaid card.