by Wayne Leon Learmond

Created on: February 05, 2010

Nearly all of us own a Credit Card or Debit Card of some form or other. Indeed, in today's society as we know it, Credit and Debit Cards rule the roost and have contributed massively to the 'Cashless Society' that so many dreamed about years before. There are many people who simply do not like having their pockets weighed down by cash and would much prefer paying for whatever they need by Credit Card - or Debit Card. The advantage of this is that your pockets are lighter, as all your money is stored on a piece of plastic.

The Difference Between Credit and Debit Cards

What is the difference between Credit and Debit Cards?  Well, to find the answer to that, you must first find out how they both work.  Let us first look at the Credit Card.  A Credit Card works by having a certain amount of cash charged to that account. In other words upon the card you have your name, account number and sort code number. When you apply for a Credit Card, your bank or building society will add a cash limit upon the card itself.  In other words, the money that they place upon the card is a 'LOAN' and HAS to be paid back.

Some people who apply for their very first Credit Card make the assumption that this is 'free money' and it is very easy to see why. A lot of people, especially young people upon receiving their first card, will then go overboard and overspend, maxing the card out before they have even begun, thereby putting themselves into negative debt.

So the bank puts a spending limit on your card and this will normally have a certain Rate of Interest that you have to pay back too. So, you not only have to pay for the card, but you have to pay the Interest upon that card too, as well as what you have spent. {which a lot of people also seem to forget about}.

If you are a person that always pays your Credit Card Bill on or before the date due, and you are reilable with that, then the bank or Credit Card Company will offer you a higher limit on your card than you previously had.  This is simply because you have gained their trust in being able to pay back what you owe them. When you are in a store and you see something you like you can purchase the item through your Credit Card. The cashier takes your card and swipes it through a computer terminal. 

This computer terminal checks whether your account is 'active' and if all is well and good, and you have not got a negative balance, it will then go on with the next procedure. It takes the total amount from

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