Know when to use your Debit Card or Credit Card?

As you near the end of the month, you probably find yourself reaching for your Credit Card more often than your Debit Card. It’s easy to see why -   a Credit Card is often your only option when sudden critical expenses pop-up. However, Debit and Credit Cards can provide complimentary benefits if you know when to use them.

While each of them has its own merits and demerits, here are some situations clarifying when to use a Credit Card or Debit Card:

• Making immediate payments
  If you immediately need to transfer funds to someone, using your Debit Card is the best option. When it comes to Debit Cards, the processing time of a transaction is minimal, which will ensure that the recipient receives the payment instantly.

• Getting foreign currency
  When you need foreign exchange, both Debit and Credit Card s can be used to withdraw foreign cash from international ATMs. However, you should note that both Debit Card s and Credit Card s attract transactional fees, with Credit Card s fees being higher than Debit Card s. However, both Debit and Credit Cards need to be enabled for international transactions by contacting customer service of the respective issuers before you travel abroad. According to an RBI directive, cards are not enabled by default for foreign transactions effective 1^st October 2020.

• Paying utility bills
  While paying utility bills the dilemma on when to use Credit Card becomes difficult as you get CashBacks and Reward Points when you use either cards to make utility bill payments However, you should remember that when you use a Debit Card to pay, the funds are debited from the existing amount in the account linked. On the other hand, when you use a Credit Card , you will be borrowing funds to pay bills. Such borrowed funds need to be repaid diligently on the due date. In this scenario, it is better to understand the benefit gained from each card specifically before deciding when to use a Credit Card or Debit Card.

• Shopping online
  If you think you will need anti-fraud protection while transacting online, both, a Credit Card and a Debit Card  offers equal protection, through the zero liability features. You can also take advantage of special offers during special shopping events on your Debit or Credit Card. However, at the point of sale, your funds will get debited from your account through your Debit Card. Whereas when you use Credit Card s, you will be borrowing funds from the bank. After a specific duration, if you haven’t paid your Credit Card bill, you will be charged interest on the billable amount. If you aren’t disciplined when it comes to paying your Credit Card  bills, it is recommended you use your Debit Card  while shopping online.
  
  Read more on smart tips to consider when to use Credit Card and avoid Credit Card fraud.

• Making a large purchase
  One of the compelling arguments in favour of Credit Cards includes making large purchases. That’s because there’s a higher expenditure limit on Credit Card s as compared to Debit Card s. However, you should also be able to repay the borrowed funds through the Credit Card. In the case of Debit Card s, the funds are debited from the funds in your linked account. If you have insufficient funds, you may not be able to make the required purchase.

• Dining out
  Both cards offer benefits when it comes to dining out. You can look up the dining offers for the respective card before using it, as they have tie-ups with different merchants. You can also take advantage of the CashBack and Reward Point offers.

• Booking a car or hotel room
  Booking cars or hotel rooms often allow transactions using only a Credit Card in some instances such as holding a reservation till the point of check-out. This makes them the obvious choice. Even if paying with your Debit Card is an option, it is advisable to use your Credit Card because you always have the opportunity to dispute the charges if you detect any fraud.

• Building credit
  Using your Credit Card wisely and paying off the balance every month helps you build a good credit history. In case you require a loan for a car or a house in the future, you can get it quickly if you have a good credit record. However, many financial institutions have started to use alternate credit scoring methods in recent times which also take into account payments like mobile, TV and other utility bills, among other things. If you generally pay your bills on time, it will certainly increase your creditworthiness – even if using a Debit Card.

• Purchasing flight tickets
  You can use either your Debit or Credit Card to purchase flight tickets. You can even collect Reward Points, miles, and also take advantage of lounge access offered on your card. However, since there is a considerable difference between the price of your tickets for domestic travel and international travel, you should consider whether the Debit Card or Credit Card is more appropriate for that particular flight.
  
  While there is no right or wrong answer on when to use Credit Card s, a customer should make this decision by understanding the rewards gained and the limitations if any while using either a Credit Card or a Debit Card in the given situation. You can take full advantage of some complimentary benefits available on both debit as well as Credit Cards. For example, most Indian cards come with complimentary insurance coverage against accidental death or permanent disability. The maximum coverage can go as high as Rs 10 lakh, subject to terms and conditions.
  
  HDFC Bank offers an extensive range of Debit Card s as well as Credit Cards. Each type is made keeping in mind the varying needs of customers.
  
  Here are some HDFC Bank Debit Cards:

• JetPrivilege HDFC Bank World Debit Card
• EasyShop Debit Card s – HDFC Bank offers nine variants:
• EasyShop Imperia Platinum Chip Debit Card
• EasyShop Platinum Debit Card
• EasyShop Titanium Royale Debit Card
• EasyShop Gold Debit Card
• EasyShop Titanium Debit Card
• EasyShop Debit Card
• EasyShop Business Debit Card
• EasyShop Woman’s Advantage Debit Card
• EasyShop NRO Debit Card

Each of these cards provides different perks, such as fuel surcharge waiver, free insurance cover, and more. Note that these Debit Cards have different daily shopping limits.

HDFC Bank also offers customised Credit Card s with state-of-the-art security and amazing CashBack offers. Some of these Credit Cards are:

• Regalia
• Diners Club Black
• JetPrivilege HDFC Bank Diners Club Credit Card
• Solitaire Credit Card

Similar to Debit Card s, each of these Credit Card s provides different perks.

Click here to apply for an HDFC Bank Debit Card and here for an HDFC Bank Credit Card.

*Terms & conditions apply. Debit Card and Credit Card approvals are at the sole discretion of HDFC Bank Ltd. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.