Benefits of a Credit Card Over a Debit Card

With more than 41.04 million credit cards in circulation in India, the key difference between debit and credit cards are what is making it the more attractive option. 

Credit cards aim to increase the purchasing power of an individual, allowing his/her to spend more than his/her income. This increment does not attract any hefty interest rate payment, as long as the bills are repaid within the stipulated period. Debit cards, however, limit the spending capacity of a person up to his/her earnings.

There are several reward points earned while transacting through a credit card in the form of a welcome bonus, regular and accelerated points, loyalty bonus, etc. these can be used to avail discounts on future transactions, or reduce the total bill amount outstanding. Debit cards provide no such benefit. 

Credit cards also help you raise your CIBIL score, providing opportunity to avail high-value loans in the future at a reduced interest rate. Certain cards also offer loans against the unused credit limit in case of emergencies, which is interest-free and can be repaid within 90 days. 

Credit cards also come with a guarantee of global acceptance for any form of digital transaction, a feature not provided by all debit cards. They also provide purchase protection against high-value products for theft or other damages caused.

The rising popularity of credit cards is improving the economic scenario of India as well, as rising purchasing power of citizens improves their quality of life. It also pushes the total GDP of the country, boosting development.

These are among the top reasons why credit cards are better than debit cards.

Increasing the use of credit cards is a positive contributing factor towards the economic growth of India as well. In the India finance market, credit cards increasing the total purchasing power and thus the overall aggregate demand of the country, the entire production to meet the higher demand rises as well.