credit cards and debit cards have become an essential in your wallet simply because of the ease and simplicity they bring to the table.
Besides the fact that you never have to worry about tendering exact change, plastic cards add a layer of security to your finances. That hard cash simply cannot provide. However, you may wonder which card to use during a time of crisis. When you urgently need a hefty amount of cash. Making the right decision, in this case, will depend on the nature of the situation you are in. Take a look at the things you must consider before making a choice.
What amount do you need?
Before deciding on a card to use, consider the amount that you need to withdraw. If you’re thinking about making a big-ticket purchase and you need large amounts of cash, ask yourself if you’re truly comfortable with the spend. If you’re able to afford it comfortably, without impeding any other financial obligations, then a debit card is a good choice. However, if the purchase is going to put you on the financial back foot, consider using a credit card, as you can comfortably pay the credit bill at a future point in time when you’ve secured enough funds.
Which card can give you access to the cash?
Though both a credit and a debit card can get you access to cash, it is important to know which card can give you access to enough funds when you need them. A key difference between credit cards and debit cards is that debit cards operate based on the amount you deposit into your account and thus, the amount you can access is limited to the money in your account. However, you can simply withdraw his amount at an ATM or via your bank branch and fulfill your needs.
In case of a credit card, you’re assigned a credit limit depending on your creditworthiness.
If you’ve got a healthy credit score and your finances are in a good place, you’ll have access to a higher amount of credit, allowing you to withdraw a significantly larger amount than the amount available to you through your debit card. Today almost every credit card works as an ATM card. This means you can access funds from your credit limit whenever you want by withdrawing it using your credit card. But, such withdrawals, unlike a debit account, may attract interest charges.
Another option is to take a loan against your credit limit, which is a service that certain credit card issuers provide. However, you need to check the interest charged and repayment policies before going ahead.
Is it easy to return the same amount to the card?
The answer to this question comes into play specifically when you’re withdrawing using a debit card. As your debit card lets you withdraw from your personal finances, you need to ensure that you maintain the minimum required balance in your savings account so as to avoid penalties. If you withdraw a large sum that drops your savings below the minimum benchmark, you’ll incur a fine for non-maintenance of balance, which will be a recurring deduction until you restore the amount.
However, this doesn’t apply to credit cards, as you can withdraw up to the cash withdrawal permit on your credit limit. Here you will have to repay the amount to the lender based on the specified terms. Moreover, with each repayment, your limit will be replenished bit by bit. Non-payment of such dues will incur interest charges and you must be wary of these as they can grow to hurt your finances.
Use the above answers to make the right decision. While a credit card can give you access to money any time, you may be wary of the interest charges that may incur owing to cash withdrawals. To get the best of both worlds, opt for a credit card that offers zero interest on cash withdrawals. One such option is the SuperCard as it offers 50-day interest-free cash withdrawals.
What’s more, you can avail a 90-day interest-free loan as well as your available credit limit and can enjoy some of the best credit card offers in India. Thanks to these offers you can enjoy special discounts, get cashback, and enjoy special access to airport lounges free of cost a few times during the year.
Besides the purchasing perks like deals with partners and reward points, the SuperCard has robust security measures in place as it offers the in-hand security feature and zeroes fraud liability. To enjoy these benefits, check your pre-approved credit card offer online and get access to a customized offer with instant online approval.