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7 Reasons Why you Should use a Credit Card and Not a Debit Card

For every 479 debit card holders, there are only 22 credit card holders in India as of December 2018.

Gaurav Khanna
2nd Apr 2019
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Debit cards are linked to the savings accounts of the holders. These cards are primarily used to withdraw cash from ATMs. Cardholders also use them to perform numerous POS transactions. On the other hand, credit cards are a form of unsecured advances, perfect to make purchases and gain reward points. One can also withdraw cash from ATMs with credit cards but high interest is charged for the same. However, some credit cards from reputed companies don’t charge interest for such withdrawals.


A significant difference between a credit card and a debit card is rewards. Credit cards provide attractive rewards against transactions which debit cards do not. Hence, the former is an exceptional tool to make purchases and earn reward points which can be redeemed to enjoy discounts, cashback, etc. on future purchases.


Here are a few reasons why you should use a credit card instead of a debit card:


use a credit card

Reward points


In some cases, both debit and credit cards bring you reward points. However, the ones provided by credit cards are more lucrative.

Plus, the number of points is higher with credit cards, targeted for specific expenses. For example, fuel, travel, entertainment, grocery, etc.

You can redeem these reward points for gift vouchers of various brands and merchants. You can also convert these into discounts on your monthly credit card statement.


Free fuel


Fuel credit cards are usually co-branded, provided by a financial institution in association with a fuel company. Purchasing fuel from the partnered pump stations will bring high reward points.

A prominent difference between a credit card and a debit card is free fuel. You can redeem the reward points earned to buy fuel for free.

Also, you incur a surcharge whenever you purchase fuel swiping your card. Fuel credit cards waive this surcharge either partially or entirely.


Loan on credit cards


Credit cards like the Bajaj Finserv RBL Bank SuperCard enable you to avail an emergency personal loan against the unused credit limit. You also need not pay any interest on the EMIs for up to 90 days.


Cheaper travel expenses


Travel credit cards are specifically aimed to make your travels more affordable. The co-branded cards, backed by airline companies, provide travel miles when you buy flight tickets from that company. Travel miles are redeemable to avail discounts on future air ticket transactions. These credit cards also offer discounts on the base fare of such tickets.


You can accumulate reward points on standard travel credit cards that are redeemable against vouchers from airlines or travel companies. You can use such vouchers to avail discounts on hotel booking, flight ticket purchases, and many more.


  • Travel insurance


Travel insurance is another difference between a credit card and a debit card. Travel credit cards provide a host of insurance covers starting from lost baggage, damaged bagged, flight delay to flight cancelled, lost passport, etc.


  • Other features


Also, travel credit cards can offer priority check-in, extra baggage carry, and complimentary visits to airport lounges. The Bajaj Finserv RBL Bank SuperCard provides up to 8 such admissions in a year.

Bajaj Finserv also brings pre-approved offers which save you time when applying for these credit cards by simplifying the process. Pre-approved offers also come with personal loans, home loans, business loans, and numerous other financial products and services. Check your pre-approved offer by submitting only your name and phone number.


Price protection


Often, it may so happen that a product you bought recently is now available at a discounted price. In such cases, you can receive a refund of the balance amount, provided you paid for that item using your credit card.


Purchase protection


Availability of purchase protection is another difference between a credit card and a debit card. Paying for a product using your credit card makes it eligible for protection against theft, loss, or damages.


Improves CIBIL score


Unlike debit cards, credit cards help you improve your CIBIL score. However, you have to follow some rules to increase this credit score.

For example:


  • Utilise only 30% of your credit limit


Spending more than 30% of your credit card limit makes you look credit hungry and decreases your CIBIL score. Hence, you must keep your credit utilisation under 30%.


  • Pay the total payment due


Your credit card statement contains two amounts:

  1. Total payable amount or the full dues you currently owe.
  2. Minimum payable amount or a specific percentage of the total amount which might also include interest.


Paying the total due amount increases your CIBIL score. On the other hand, going for the minimum amount due has the opposite effect.


Lastly, one of the significant differences between a credit card and a debit card is security. Credit cards offer more protection on online transactions compared to debit cards. So, go for credit cards and make sure to compare and check all the features before you apply for a credit card.

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