Apr
29
What’s the difference between a Visa debit and Visa credit card?
Filed Under Credit Cards, Debt Reduction
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What’s the difference between a Visa debit and Visa credit card?
It can be confusing but if you don’t fully understand the difference then it can end up costing you a lot of money!
The Visa debit card (or Maestro card or many other variations) is a card that allows you to pay for goods and services but the money comes directly from your bank account, thus you can only draw as much as you have in your account or up to the overdraft limit that you have. Usually, unless you are already overdrawn or it takes your account overdrawn, you won’t pay interest on the amount paid.
However, a Visa credit card is a line of credit granted by the credit card provider up to previously agreed limits. Each month you pay back either the minimum, a fixed amount or the whole balance. If you pay back the minimum or a fixed amount, leaving a balance on the account, you will PAY interest on the balance… and this can be a lot of money!
Know the difference between the two types of cards and keep a close eye on your spending. That way you won’t slip into any difficulty with money.