Debit Vs. Credit Card — Which One Should You Use for the Holidays?

Debit Vs. Credit Card

Debit cards are only a medium to access funds available in your savings account whereas a credit card lets you access a pre-specified line of credit to make transactions and purchases.

To determine which of these two cards are better for funding your holidays, you must first understand the difference between credit cards and debit cards.

Credit Card and Debit Cards: How do they Differ?

Listed below are some key points of difference between the two.

  • Debit cards are directly linked to your savings account. Using these cards results in the expenditure of the money in your account. On the other hand, when you use a credit card you are not expanding your savings, but rather a line of credit that your credit card issuer offers to you.
  • You do not have to pay any bills for debit cards, but you must clear debts and bills linked to your credit card.
  • Credit cards have a reward point system, which allows you to avail discounts on products and services. Debit cards do not offer such facilities.
  • Debit cards allow you to withdraw cash from your savings account without any interest charged on the transaction. However, cash withdrawal through a credit card results in your financing company levying interest on the sum.

Now that you know some of the basic differences between credit cards and debit cards, here are some reasons why credit cards are often better than debit cards, especially for travel and vacation purposes.

  • Take Advantage of Travel Perks

Some of the best credit cards provide useful discounts and offers on flight tickets and hotel bookings. For instance, your card may allow you access to the lounges at airports, even when you are traveling domestically.

Additionally, credit cards help accumulate flyer miles, which you can then redeem to avail discounts on future flight ticket prices. Debit cards do not provide any of these features.

  • Improving Your Credit Score

While you holiday with your family or friends, using a credit card will allow you to improve your credit rating. If you manage to restrict your travel-related expenses within 40% of the total credit limit for the card, you stand to increase your credit score.

A better credit rating will help you avail loans in the future. Keep in mind you must pay the credit card dues on time to prevent a negative impact on your credit scores.

  • No Impact on Savings

Generally, a holiday results in considerable expenses, which may leave your savings compromised if you are using a debit card for the tour expenses. However, using a credit card does not affect your savings. People use the best credit cards to fund such expenses to ensure personal financial security.

  • Accumulating Reward Points

When you use a credit card, you can start to accumulate reward points. After some time, you can redeem these points across various retailers and service providers. Some of the best credit cards in the market allow you to redeem your reward points on flight tickets, shopping, and other expenses.

  • Paying for Travel through Installments

A credit card allows you to plan holidays even when you do not have the necessary funds to go on such a trip. This is because you can break down the entire cost of EMIs through your credit card. Such EMI conversion features make vacations more affordable, especially international travel with exclusive cards like the Bajaj Finserv RBL Bank SuperCard.

Also, Read This: What are Different Types of Bank Accounts in India

Bajaj Finserv provides pre-approved offers, which make availing loans easier and faster. These offers are available for unsecured credits, such as a personal loan, credit cards, and business loans, and secured loans, like home loans. You can check your pre-approved offers by providing your name and phone number.

The best credit cards allow you to engage in hassle-free travel while improving your creditworthiness at the same time. Furthermore, such cards offer you the opportunity to visit your dream destinations without having to worry about a lack of funds.

Also, Read This: ECS Mandate & NACH Mandate Form Download

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