Question

Compare and contrast the credit card and debit card.

Answer 1

Basis For Comparison	Credit Card	Debit Card
Meaning	A credit card is issued by a bank or any fi­nancial institution to allow the holder of the card to purchase goods and services on credit. The payment is made by the bank on the customer’s behalf.	A debit card is issued by a bank to allow its customers to purchase goods and services, whose payment is made directly through the custom­er’s account linked to the card.
Implies	Pay later	Pay now
Bank Account	A bank account is not a prerequisite for issuing a credit card.	A bank account is a must for issu­ing a debit card.
Limit	The maximum limit of withdrawing money is determined according to the credit rating of the holder.	The maximum limit of withdrawing money will be less than the money lying in the saving bank account.
Bill	The holder of the card has to pay the credit card bill within 30 days of every month.	There is no such bill, the amount is directly deducted from the custom­er’s account.
Interest	Interest is charged when payment is not made to the bank within a specified time period.	No interest is charged.