Credit Card
A Credit Card is a form of consumer finance. The credit card customer is the borrower and the credit card issuer is the lender. When the credit card customer buys something by using Credit Card, the issuer of the card pays for the purchasees on the behalf of the customer and issues bill on a monthly basis ( including Interest and other changes ) to the credit card customer. The customer can also withdraw cash from ATM within the limit.
(a) When Credit Card is used for Cash Advance :- In this type of transaction, there are two parties, one is credited card customer and other is credit card issuer. Customer withdraw cash from ATM and issuer send Bill's ( including Interest and other changes ) to the customer on monthly basis.
(b) When Credit Card is used for purchasing :- In this type of transactions, there are three parties.( First - Credit Card customer, Second - Merchant Outlet and Third - Credit Card issuer ). When credit card customer purchases something from merchant outlet, then card issuer pays for purshases on behalf of the credit card customer and issues bill on a monthly basis including Interest and other changes.
Debit Card
Debit cards are used to withdraw cash from ATM. In case of of Debit Card, there are two parties, Debit Card customer and his banker. To use ATM card you should have Cash balance in Bank Account.
Difference between Credit Card and Debit Card
Credit Card is a form of loan from from credit card issuer and Debit Card is a form of service offerd by his banker.
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