Mumbai: Credit cards and ATM cards are very similar in appearance since they are both plastic cards that can be used to make financial transactions. , Despite being plastic cards used for financial transactions, credit cards and ATM cards operate very differently.
Credit cards
Banks as well as financial institutions provide you credit cards which basically is a medium for financial leverage; with them you are eligible to spend borrowed amounts at whatever amount, repay the debt any time because that serves you revolving credit.
1) How it operates
You borrow your money and shop on your way by means of credit cards, so they just happen to combine all aspects discussed. To avoid paying interest, the borrowed amount has to be paid back within the grace period.
2) Benefits
Instant money access for purchases made in-store or online.
Frequent usage is promoted through rewards such as loyalty points, discounts, or cash.
Chance to build your credit score through responsible usage.
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ATM cards
Often called a debit card, an ATM card is actually connected directly to your savings account. It lets you access the money in your own accounts to make purchases, withdraw cash, and conduct other everyday banking transactions.
1) How it operates
Your bank account is connected to your ATM card.
Transactions immediately take money out of your account.
2) Benefits
Transactions are limited only to your account balance, so you always know how much you are spending.
Promotes financial management and living according to your means.
Other cards have rewards in points for specific kinds of transactions.
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