#creditcardvsdebitcard Archives - CredPal

Credit Cards VS Debit Cards: The Differences

CredPal — Mon, 13 Sep 2021 18:28:37 +0000

Credit cards and debit cards can be mistaken to be the same just at a glance. They can be likened to identical twins though born from the same mother, they exhibit different characters. You would hardly notice any difference between both cards in their appearance. They are both plastic cards, both have 16 digits card numbers, EMV chips, expiration dates, and personal identification number (PIN) codes. Despite these similarities, they are not the same.

What is a credit card?

A credit card is a small plastic card issued by financial institutions or lending organizations like CredPal. CredPal funds the card with money that you can use for small-ticket purchases and everyday needs. Then on your repayment date, you pay back what you have spent on your credit card with a small interest according to the subscription plan you paid for.

Facts About CredPal Credit Card.

The financial organization decides your credit limit based on your income, credit history, and other factors.
You pay back with an interest.
Your repayment date is set around the day you receive your salary.
You cannot spread repayment, you pay back all you have spent at once on your repayment date.
Your credit history is affected when you do not make timely repayment.

What is a debit card?

A debit card is a payment card that allows you to make payments directly from your bank account. The account is not funded by any financial organization, the account is funded by you. This is the direct opposite of what a credit card is and the only similarity is that a debit card is also issued by a financial organization.

Facts about debit cards

You won’t pay interest on your purchases.
You can’t make any purchase if there is no money in your bank account.
Your credit history will not be affected by debit card spending.

Key Differences Between Credit Cards and Debit Cards

1. Spending

Credit cards: You can make a purchase even when you do not have enough funds in your checking account

Debit cards: Spending limits depend on what is in your checking account. You cannot make any purchase if you do not have any money in your account.

2. Rewards

Credit cards: Credit cards offer cashback and discounts when you use them to make purchases.

Debit cards: Debit cards don’t offer rewards in any form except when the merchant is running sales.

3. Access to Funds

Credit cards: You only have access to the funds in your credit limit. You cannot spend beyond your credit limit.

Debit cards: You have access to only the money in your checking account.

4. Credit Score

Credit cards: One-time full repayment can increase your credit score.

Debit cards: Your purchases don’t affect your credit score.

These cards have their values and one is not inferior to the other. It is advisable to have both and also profitable to use your debit card as your credit card and credit card like your debit card. What this means is that you use your credit card to make all purchases and use it to meet your needs then use your debit card to make repayment at the end of your billing cycle.

This helps to build your credit history and opens you to rewards such as cashback and discounts.

Advantages of Building a Credit History

Better chance for credit cards and loans approval
You are opened to rewards such as cashback and discounts
Helps increase your credit limit.

Get your credit card today with CredPal, register on www.credpal.com, and start enjoying the benefits that come with it.

Source

The post Credit Cards VS Debit Cards: The Differences appeared first on CredPal.

8 Things to Know Before Getting your Credit Card

CredPal — Thu, 05 Aug 2021 13:18:50 +0000

Credit card education is important because credit cards are prone to be misused if they are not properly handled. Although there are thousands of credit cards in Nigeria there are users who still cannot find their way around the use of a credit card and run into debt. These 8 essentials will help you to avoid running into debt and other things that could as a result of not managing your credit card well.

1. Understand the concept of Credit cards

Before you get a credit card, you should know what a credit card is. A credit card is a card that allows you to borrow money from a lender. The “money” borrowed is known as the card’s credit limit. You can use the card to make basic transactions like paying for food, gym membership, hair appointment, shopping for groceries or clothing, online purchases, and several other everyday expenses you may have. The fund in the card is provided by financial institutions or credit card companies like CredPal.

2. Understand credit card terms

Just as debit cards have terms so does a credit card. Credit card terms are words and phrases you will regularly come across as you use your credit card. This ranges from knowing your billing date, billing transfer, credit limit, payment summary, posting date, reference number, cashback, and so on.

Also Read: What is a credit card?

3. Understand your credit card interest rate

An interest rate is an amount you pay financial institutions or lending organizations like CredPal for using their card. Credit card interest varies from the rates for purchases to the rates for cash loans. Here’s CredPal’s interest rate.

4. Paying late is costly

You are required to pay back the money you spend on your credit card after your billing cycle which is mostly your salary date. Paying late can attract fees and can affect your credit score. You can avoid this by automatically setting your repayment from your bank account or set a reminder that can prompt you to pay when due.

5. Make sure you’ve not applied for different credit cards before

Switching between different credit cards can affect your credit score which might stop other lending organizations from giving you a credit card because your account has probably been refused by other organizations which would reflect on your credit score.

6. Use your card responsibly

One of the benefits of using your credit card responsibly is that you are covered by unnecessary fees that you may incur on your card when you don’t make timely repayments.

Credit Card Education – Below are tips that can guide you to using your card responsibly

Make your repayment on time at the end of the month. By doing so, you assure your lender that you have enough to pay back and this can increase your credit limit and increase your credit score.
Make your repayment in full at the end of the month: Do not abuse the purpose of a credit card. By abusing it, you extend it to a long-term loan rather than a short-term loan that it was built for. And you will be charged for late repayment.
Try not to max out your credit card: This is just good practice. helps you to control how you spend with your credit card so that you can pay back when you have to. If you max out your credit card you might find it hard to make your repayment and that might incur charges and might lead to debt.
Never put anything on a credit card that you won’t be able to pay in full when the bill arrives.

7. Read your credit card terms and conditions

Many run away from reading terms and conditions because they feel it is too long and by running away, they miss out on the important messages. It is essential not to skip these terms to be on the safer side and make sure the terms and conditions suit you.

8. You get rewards for using a CredPal card

With a CredPal credit card, you get rewards with money or points that you can use to buy anything from a frozen turkey to a flight to Turkey. As your credit card performance and income improve, your credit limit may be reviewed for an increase. That means you have more funds at your disposal.

Credit card education is very essential before owning a credit card. Running into debt is not the goal for owning a credit card, the goal is to help meet your needs at the time you need them. Get familiar with these terms and make your repayment early so you can have a great credit score.

Source

The post 8 Things to Know Before Getting your Credit Card appeared first on CredPal.

What is a Credit Card?

CredPal — Wed, 04 Aug 2021 17:29:25 +0000

A credit card is a card that allows you to borrow money from a lender. The “money” borrowed is known as the card’s credit limit.

You can use the card to make basic transactions like paying for food, gym membership, hair appointment, shopping for groceries or clothing, online purchases, and several other everyday expenses you may have.

Credit cards have been in existence since 1920 and fast-forward to 2021, they are still being used by low, middle, and high-income earners in different parts of the world.

Credit cards are issued by both financial and lending organizations, one of such organizations is CredPal.

CredPal is a financial technology company that offers credit cards and loans to individuals and businesses. These credit cards can be used to take care of our everyday needs and small purchases. Then, on a specific date (referred to as a billing date), you pay back whatever you have spent on your credit card to the organization.

Credit card vs. Debit card

Some individuals confuse a debit card with a credit card. Let’s break it down for you.

CREDIT CARD

A credit card is a small plastic card that allows you to borrow funds to make payments at the point of purchase. You are able to purchase items without cash or cheques and also withdraw cash from ATMs. A credit card gives you safe, convenient, and instant access to funds. In this case, CredPal provides the funds.

Individuals and business owners have access to CredPal credit cards as long as they have a stable means of income that can enable them to pay back when due.

DEBIT CARD

A debit card is also a plastic card that allows you to spend money by drawing on funds you have deposited at the bank. When a debit card is used, the funds are deducted from your account, unlike a credit card.

Credit card funds come from the lender while debit card funds come from the money already deposited into your account by you.

How to apply for a CredPal credit card

Applying to get a CredPal credit card is one of the things that are easier than ABC, all you have to do is download the CredPal app on android or iOS, then register by providing the required information which you can find here.

After the successful completion of your application, your profile will be verified and a credit limit will be given to you.

How does the CredPal Credit Card work?

You don’t have to worry about putting money on the card like you would on a debit card, CredPal provides you with the money you spend. CredPal credit card also helps you get rewards for spending money, unlike your debit card.

This helps you to have a backup whenever you run out of money. You get the things you need without waiting till a later time when they may be more expensive (you know how the dollar rate fluctuates) or the need may not even be as urgent.

What is CredPal’s interest rate?

CredPal has three credit card pricing plans which are the standard plan which gives its users an 8% monthly interest rate, the premium plan at 5%, and the prestige plan at a 2.5% monthly interest rate.

Credit card terms you should know

Now that you are in, let us help you get familiar with some CredPal credit card terms you should know.

1. Credit Limit:

The maximum amount of money you have on your credit card which you can use at any time.

2. Card Balance:

This is the total amount you have used on your card that is pending repayment.

3. Repayment Date:

The repayment date is when you are expected to pay the balance you owe.

4. Billing Date:

This is the date when a statement is generated and sent to you. This is always 2 days before your repayment is due.

5. Billing Cycle:

This is the length of time between the last billing date and the current billing date. At the end of every billing cycle, you will need to repay your balance so that your card can be automatically funded again for you to use.

6. Credit Card Statement:

A summary of all transactions carried out on customers’ accounts in one billing cycle. Transactions include debit transactions and credit (customer repayments). Statements are only generated on the billing date.

7. Balance transfer:

The process of moving part of your balance from your credit limit to the bank account you used in signing up on CredPal. This makes it easy for you to spend from your personal account if you don’t want to make the payment from the CredPal app.

Credit cards can be wonderful financial tools that offer some great benefits for those who use them to their advantage. If you have the discipline to pay off your balance each month.

Now that you know about credit cards, get started with CredPal here.

Source

The post What is a Credit Card? appeared first on CredPal.