When to use debit card, credit card for purchases

With different payment options in our wallet, it’s natural to wonder which is the best for making purchases - debit or credit? While both methods are widely accepted and online shopping has only further promoted their use, each has a little edge over the other.

When to switch over between debit card and credit card is a personal choice that will differ from person to person depending upon their personality, financial behaviour and lifestyle.

To figure out what’s best for you when, here’s what you need to know:

Incentives and rewards

Is your bucket list full of places you want to visit? Or are you a movie buff who has every weekend reserved for a new movie? Perhaps you are a connoisseur of food who enjoys trying out new places frequently. Either way, a credit card should be your pick.

Most credit cards offer incentives and rewards when you make a purchase using them. These rewards get you discounts on movie tickets, restaurants and flyer miles that may get you free flight tickets.

With the Bajaj Finserv RBL Bank SuperCard you can get up to 20,000 reward points as a welcome gift and can earn more with every transaction to enjoy discounts and more benefits every month.

Debit cards usually have no such rewards or incentives.

Fees

Debit cards have no fees and are virtually free of charge. Whereas credit cards usually charge an annual fee, over-limit fees, fees for late payment in addition to the monthly interest on the card’s outstanding balance.

Moreover, while making a purchase, many merchants may charge you an additional fee if you make the payment with a credit card as they have to pay a processing fee for the same.

Staying on a budget

The most beneficial feature of using a debit card is that it will keep you within your means. A debit card won’t let you spend more than you have and that will help you stay on your budget and keep you from making impulse purchases.

A debit card is a smarter choice than a credit card if you’re trying to manage your money better. Using a debit card won’t shock you with a large bill at the end of the month unlike a credit card.

Credit score

A credit score is one of the first things financial institutions look at when you apply for any kind of loan. Whether you’re finally ready to set your roots and buy a house and are applying for a home loan or are applying for a loan for your wedding, your credit score is one of the most important determining factors in whether you get the loan and on what interest rate and terms.

A credit card is what helps you build a credit score by building a credit history. A debit card on the other hand is not considered for the same. A credit score is essential not just for availing loans but also when you want to emigrate to another country or pursue your higher education abroad.

As you can tell by now, a Bajaj Finserv rbl credit card is a great payment option if you use it smartly. You can save a lot of money on regular expenses with the help of rewards and build that much-needed credit history. But if you’re someone who’s trying to improve your financial behaviour or are just starting out with managing money, a debit card may be a better choice.