Understanding The Difference Of Credit Card and Debit Card

9:39 AM
Everyday, our financial system is expanding to the more complex and more sophisticate. And some of our needs are the credit card and debit card. Formerly, credit card our abbreviated as CC, rarely used in Indonesia. But, slow but sure there are more and more people will use these card.

We will discuss about the difference of the debit card and credit card. These card are issued by financial league. And because not too many people knows about the difference of these cards, so we will discuss it.

Understanding The Difference Of Credit Card and Debit Card

Basic Explanation

The general explanation of debit card is the card that used for any financial transaction and issued by bank. This card can be substitution for the cash money. The debit card cannot be used exceed the account balance.

While the credit card is a card that issued by a bank for financial transaction with the installment without any collateral system. The credit card can be used without regarding to the bank account's balance. But, the credit card have a monthly usage limit. So, pay attention to the limit before you use it.

How to apply

The debit card can obtained together with the opening of your bank account. The credit can can be used for withdrawing money from the authorized bank ATM. You aren't need to prepare any requirements to obtain beside the requirements for opening a bank account.

And the credit card is obtained by applying some application to the bank. Not everyone can applying the credit card. The bank will evaluate the applicant. These include evaluating financial condition of the applicant. If its eligible, the applicant will obtain their credit card with suitable usage limit with it (usage limit is a credit amount that customer can use monthly. The minimal usage limit at Indonesia is 5.000.000 (five million) rupiahs.  

How To Use

These two cards haven't any much difference. These cards can be used to withdraw some amount of money at ATM or EDC swap on the merchant.

The difference of these two is how to authorize the transaction, where the debit card can be authorized by a PIN only (and if the PIN are correct on the transaction, the transaction would be settled)

But, we can use 2 option on credit card for authorize transaction matters. We can use PIN (the PIN terms is same with the credit card) or signature. Peoply usually more consider to use signature than PIN because the security reason.

This is because not everyone can copying the signature easily. Some people is like to take a look to someone who entering their atm's card PIN. If the signature isn't same with the credit card surface, the transaction wouldn't settled.

Physical Appearance

If you see a glance at these card, there are not many differences. But, the front face of the credit card usually have the owner's name and the valid date printed on it. But on the credit card, the front side only have 16 card digit that printed on it. 


For the debit card, there are no monthly charge no matter you use it or not. If there are any monthly charge, that is the bank account administrative fee, not the debit card monthly charge.

But the credit card have monthly administrative fee (the amount may vary, depends on the credit card type. The higher limit you got the more fee you charged). The administrative fee can be removed, but you must use your monthly limit.

User Advantage

This is the advantage of credit card. Compared to the debit card, the debit card usually have not too much promotion because the bank can't get any profit. But, the bank company will attempt to work with many merchant to increase their credit card user. This is because the more customers use their credit card, the more interest that bank would be get.

Promosi Kartu Kredit
The credit card promotion on many merchant

The credit card can be used for "savior" too. For example, if the pay day is still too far but the money is almost running out, the credit card can be used for solution than take a credit from others.

But remember, that you must use your credit card wisely because any of transaction history is monitored by bank central. If the credit card monthly bill isn't paid off, the credit card holder can threatened with bank's blacklist and cannot use any installment facilities before they pay their postponed bill.

That's all. Remember you should not give your card to anyone who you didn't know well because anyone can misuse it. Be wise and careful for handling your transaction because this is about your financial problem.

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