What is debit card? Distinguish between credit and debit cards

There are many types of bank cards issued such as: debit card, credit card, prepaid card, loyalty card, .. In which, debit card and credit card are two popular and used cards today.

Did you really distinguish between credit and debit cards, what are the features of these cards? The following article, Fastloans.PH will help you understand and distinguish what is debit card?

debit-card philippines

Table of Contents

What is a debit card?

Debit card, is one of the basic card products of banks. The card performs many functions such as:

  • Pay the bills
  • Deposit – transfer – withdrawal transactions at ATM system
  • Saving
  • Recharge phone card online

The debit card is considered as the most popular form of cash alternative today. The card is linked to a bank account. You can only pay with the money you have in the card.

This method is different from credit card: spend first and then pay later, you need to understand clearly to avoid confusion.

Debit cards are divided into 2 categories:

  • Domestic debit card: Domestic use. You can use this card for payment when shopping, dining, online shopping, … provided that these services must be in the country. Depending on your bank, you may have to pay a fee for using your local debit card, but it is usually free.
  • International Debit Card: Similar to domestic debit card but with global scope. There are cards like MasterCard Debit, Visa Debit, JCB Debit, … Usually will be charged a certain fee when used.

Whether it’s domestic debit card or international debit card, you can only use it when you have money in your account. And you must not spend more than the amount that the card has. Some banks also stipulate that the card must ensure a minimum balance from 0 to 500 peso.

Opening a debit card is quite easy, and banks support opening debit cards quickly. In particular, the requirement to open a card only needs a citizen over 18 to be accepted. Some banks charge a fee for card issuance in addition to those that issue free cards and give more money to new accounts.

Compare the pros and cons of credit and debit cards

The above comparison table has helped you to distinguish the two types of cards that are easily confused. To choose the right card for your needs, let’s compare the pros and cons of credit and debit cards right below.


Debit card advantages

The debit card is considered to be the card with the simplest and fastest card-making process. Simply bring your citizenship or identity card to the bank branch you choose to issue your card with and follow the card opening instructions.

The usage fee of the debit card is very low. Normally, the domestic debit card’s cash withdrawal fee at ATM is only PHP 2-5. With international debit card, cash withdrawal fee is various, can take up to PHP 150 – 200

Debit card with transfer feature. You can easily transfer money to relatives, friends and partners with simple and quick operations at ATMs or through internet banking software or smart banking applications on your phone.

You can manage your payment according to the amount deposited to your debit card account, this helps you to be proactive in controlling and planning reasonable spending compared to other forms of credit payment.

Debit card disadvantages

Cardholder must be careful in the process of using the card so as not to lose the Pin code and password, the cardholder can easily lose money in bad transactions.

In addition, the limitation of the debit card is that there are very few incentive programs and gift services from issuing banks.

Credit card advantages

With credit card, you can control your monthly payments and spending easily. Every month, the bank will provide you with a statement of spending, date of payment … based on which customers can actively spend smart, financial balance for the next time period.

Currently, in order to secure information and avoid risks for customers when using credit cards, most banks aim to apply advanced security technologies. If you lose your card, just ask the issuing bank to lock your account immediately over a call. If you are a credit card holder, just call bank hotline and your card is protected.

Credit card owners receive many preferential programs, such as earning points and redeeming gifts, and receiving discounts from affiliates with banks. With credit card, customers not only get the annual fee waiver for the primary cardholder, but also have the opportunity to receive gifts, hotel discount vouchers, meals, travel, free cash withdrawal …

In some emergency cases where cash is needed, a credit card is a lifesaver for cardholders. This is a fast and affordable way to borrow / advance money compared to other forms of borrowing. However, credit card withdrawals should only be made when there is a real urgent need, because this is not the main feature of this card.

Credit card disadvantages

Credit cardholders will easily fall into debt during the “over swing”. So, before deciding to buy an item think about ensuring future affordability.

For each cash withdrawal from a credit card, some banks will apply a withdrawal fee. Not only that, after 45 days if you do not pay the full amount of debt as prescribed, you will incur quite high interest rates. This interest penalty will cost you a lot of money, so you need to plan in spending and pay attention to pay your debts on time.

Credit card does not have transfer feature. This will be inconvenient for the cardholder. However, this is the regulation to ensure the control of outstanding loans, avoid risks of financial fraud and prevent the possibility of inability to repay debts from customers.

How to open a debit card

To open a debit card, you need to meet all the conditions required by the bank:

  • You are Filipino / foreigner living in Philippines
  • Wishing to use cards, meeting the conditions for card issuance and use as prescribed by law
  • Cardholder has a valid ID card / passport
  • You bring your ID / Passport and card opening fee to the bank and follow the instructions of the bank staff. After about 7 to 10 working days, you go to the bank to receive the card and pin code. You proceed to recharge and change the pin code to start using.

Currently, some banks have a form of opening online debit cards. You just need to visit the website and follow the instructions.

After successful registration, the card will be delivered to you or the nearest bank branch.

Should I use a credit or debit card?

What kind of card should you use between debit and credit card? Each type of card is suitable for different users and purposes. Therefore, if you know how to exploit and use it properly, you will maximize your financial benefits.

When should I use my debit card?

If you have a transfer income enough to cover every need in life, you can use a debit card. All payments, withdrawals, and transfers will be filled with just one debit card. You also only need this card only if you do not often have unexpected financial needs; There is no need for the reserve fund …

Especially, if you regularly withdraw cash, between debit and credit cards, you should choose a debit card.

With debit card, you will have no fees or very low fees when withdrawing money at ATMs inside and outside the network.

If you use a credit card, you will be charged 4% of the total amount withdrawn. In addition, this amount is also charged with high interest like personal loans. You should not withdraw money by credit card.

Should I open a credit card?

The credit card is suitable for people with stable income. If you have a steady monthly income; you often have unexpected financial needs and want an effective backup fund, you should use a credit card.

Between debit and credit cards, you should choose a credit card if you need to spend and enjoy the big life.

Your credit card offers you the opportunity to enjoy special offers from a network of partners affiliated with card issuers in all areas from: dining; entertainment; travel; shopping; health care; beauty treatments… Using your credit card, you earn points; refund when spending.

Between debit and credit cards, credit cards offer optimal financial benefits. As a result, credit cards are used more and more widely.

Please contact us for instructions on how to open a debit or credit card today!

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