Debit & Credit Cards - E-Payment System, E-Commerce Video Lecture | E-Commerce - B Com

credit and debit two very different
cards all right so let's talk about
credit and debit cards both are used in
place of cash to pay for things you buy
both are convenient and accepted almost
everywhere both are made of plastic and
probably yeah in your wallet right now
and both offer you know some kinds of
fraud protection and security especially
when compared to cash right but do you
really know the advantages and
disadvantages of each hmm or what makes
them different from each other do you
well there's actually a lot separating
the two yeah so let's start by taking a
look at your daily routine shall we okay
this is fun say you're out and about and
you stop for a cup of coffee latte my
fave because you know you like to treat
yourself right you deserve it you get to
the register pull out your wallet and
the cashier asks you credit or debit
here's the thing it's a question we hear
almost every day but don't really think
about that much you know I mean what's
the what's the difference between the
two which which one should we use and
when and most importantly why is it so
important to know the difference all
great questions and the best way to
answer them is to take a look at the
pros and cons associated with each but
first lets you know clearly define each
type of card a debit card is a payment
method that's linked to your bank
account so the money you spend comes
right out of your own personal checking
or savings account easy-breezy a credit
card is also a payment method but
instead of tapping into your own money
your purchase is paid for temporarily
using someone else's money like the bank
or card issuer this of course comes at a
price
interest okay now for the pros and cons
let's start with debit after you swipe
that debit card money is automatically
taken out of your account yeah so you
know in this way it's a lot like using
cash except more convenient since you
don't have to carry cash any of it plus
it's also great for keeping track of
what you spend because if you're
enrolled in online banking you can
review your transactions online or you
can always check your balance at the ATM
oh and speaking of ATMs let's say you
need some paper money well your debit
card
well you know it's usually combined with
your ATM card meaning if you have money
in your account you can usually get cash
wherever you can find an ATM which these
days is pretty much everywhere but
remember to avoid those ATM fees be sure
to use your own bank's ATM another plus
is that many stores that you know they
allow you to take cash out at the
register yeah all you need to do is use
your PIN but good question here we go
what if you leave your card at the
register or it falls out of your pocket
somewhere along the way can anyone just
pick it up and start making cash with
Charles too well thanks to your PIN
number most likely they can't know your
PIN is an identification code that adds
a layer of security making it difficult
for anyone to access your money you know
I mean it's important to safeguard your
PIN to keep your money safe so so don't
give it to anyone and in those cases
where let's say someone gets hold of
your debit card and and uses it for
something where your PIN isn't required
well luckily most banks have some kind
of fraud protection policy in place that
can help protect you if this happens and
here's one more benefit of your debit
card you don't pay interest on your
purchases like you would with the credit
card so your latte may be overpriced but
as long as you have the sufficient funds
in your account you only pay the price
that's listed making your debit card a
great way to avoid the interest that can
come with buying on credit so those are
the pros debit is convenient secure
interest free and some people find it
easier to keep a budget now let's talk
about a few of those cons first your
card can be declined this happens when
you don't have enough cash in your
account to cover your purchase getting
the Klein happens sometimes even to the
best of us and while not being able to
complete a purchase can be frustrating
it does protect you from spending the
money you don't currently have do keep
in mind that some banks allow customers
to overdraw their checking accounts for
a fee if you think this might be a
useful feature for you check with your
bank to find out their specific policies
okay so now let's rewind a little bit
the loop and talk about credit cards
some people think of credit cards is is
working
like like short-term loans because
essentially you're borrowing money from
a bank or card issuer to pay for your
purchase you know and when it's that
time to settle up if you've carried a
balance from one billing cycle to the
next you know most likely going to have
to pay interest in addition to being
useful for making everyday purchases a
credit card can really come in handy in
emergency situations when you're short
on cash so let's say you find yourself
stranded on the side of the road because
a big ol pothole just took out a couple
of tires a credit card is a good thing
to use for a tow and new rubber the
thing to remember is you have to pay for
it later and speaking of pain when you
pay your credit card bills on time
guess what good things happen to your
credit overall in fact if you pay your
bills on time stay within your credit
limit and pay more than the minimum
balance on your card I mean you can
improve how your credit is evaluated
that's huge and you know that might
qualify you for lower interest rates on
loans and credit cards which is great
news if you're looking to take out a
mortgage or something like an auto loan
in the future lots of credit cards come
with extra perks too you know like grace
periods that allow you to make purchases
with without interest as long as your
balance is paid in full each month or
rewards points that can be used for all
sorts of things like like airline miles
or hotel stays and you know some cards
even offer cash back every month in fact
if you already carry a credit card you
know you might be missing out on
features you don't know about things
like gum travel insurance or purchase
protection that's a great one you know
that's that can really come in handy
when you're buying a big-ticket item
like a new brand new washing machine or
a cool laptop you know in fact when
something goes wrong with the purchase
I'll call to your credit card company
can make the difference between you
fighting to get your purchase refunded
or replaced on your own and having the
power of a big company on your side to
help you out which is nice
fraud protection is another big benefit
of a credit card let's say someone gets
hold of your card and uses it you might
not be liable for what they buy with
your good name and this is true of debit
cards as well but you know the policies
you know they might be different so as
you can see there there are clearly many
benefits to using credit cards but you
know there are some potential downsides
as well and those typically come about
you know when you don't use your card
responsibly like when you miss a payment
you'll be hit with late fees and your
annual percentage rate or APR can also
rise even worse it can have a negative
effect on your credit you should also be
careful about going over your credit
cards limit because because if you do
you'll likely pay for it in fees another
thing to look out for is overspending
some cards they'll give you pretty high
spending limits and without discipline
you know you can end up spending your
way into a place where you may not want
to be unnecessary debt a and that's a
hole that can be hard to climb out of so
credit or debit the choice is yours and
and that's what we're really talking
about here making a smart decision and
understanding the pros and cons that
come with each so the next time you're
standing at that register you know
you'll know that whichever card you
decide to use you'll be using the one
that's right for you it's the kind of
knowledge that helps you sleep better at
night unlike that extra-large latte you
just bought yourself
you