Why are Credit Cards the First Choice of Online Shoppers Over Debit Cards?

credit cards vs debit card

Millennials preferring credit cards over other forms of payments increased by 35% in FY19 over the last 4 years. On a different note, the number of cardholders below the age of 25 years has surged 10 times across the same period. Benefits of EMI payments and more attractive offers provided by issuers are among the major drivers of credit card growth. With a total transaction value of Rs.6 lakh crore, credit cards are becoming among the most preferred financial products.

With the increasing popularity of the e-commerce platforms triggered by the boosted penetration of smartphones and the internet, online transactions have taken over offline counterparts.

Credit cards are reportedly growing faster than new debit cards. There are specific differences between credit card and debit cards. But the latter are coming across as the more preferred choice for online shoppers over debit cards.

Here are the reasons why credit cards are being comprehensively preferred over their counterparts –

 

1. Opportunity to earn reward points on each transaction

 

Except for rare occasions, transactions via debit cards fetch its cardholder with no reward points. This is one of the significant differences between credit card and debit card.

In the case of credit cards, earning reward points is a common perk. Accumulate these points and redeem it later as cashbacks, discounts, vouchers, etc. Considering that one has access to additional borrowed funding, these reward points are but an add-on benefit for credit card users.

Availing feature-rich credit cards like the Bajaj Finserv RBL Bank SuperCard also ensures that they can make high-value transactions or purchases and repay the credit over 3 easy EMIs against a flat processing fee. They can thus refrain from impinging on their financial goals or digging deep into their pockets to repay the due amount.

Furthermore, with such leading financers, existing borrowers can enjoy the privileges of pre-approved offers as provided by Bajaj Finserv. These offers ease the application process to avail financial products. They are available on numerous financial products including credit cards, personal loans, business loans, etc. You can take a look at your pre-approved offer by providing a couple of essential details like your name and contact number.

 

2. Mitigated risks of incurring financial losses if a card is stolen or lost

 

Credit cards are but a financial tool with enhanced security. The credit utilised by the cardholder for a transaction or purchase is not directly transferred to the merchant. Thus, the risks of financial loss in case of credit card frauds are low. Such cards are the safest options for online shopping platforms against data hacks and security breaches.

On the other hand, debit card transactions for online shopping present more chances of financial risks considering it is linked to the cardholder’s account.

 

3. Enjoy cashback and discounts while shopping at partner retail stores

 

Using your credit cards wisely can help you earn the maximum reward points that can later be redeemed against cashbacks or discounts or other offers. All that you need to do is keep track of extra reward point offers and opt to make your online shopping using credit card from there.

 

4. A convenient solution in case of discrepancies

 

Reputed credit card issuers are proactive about ensuring the financial security of their clients, in cases of any discrepancy. Subsequently, the chances of resolved disputes are higher with credit cards.

 

5. Aids in improving the credit score

 

Timely payment of credit card bills has a positive impact on the cardholder’s CIBIL score. Consequently, it becomes convenient for him to avail future financial assistance, and request for a credit limit increase.

With such queued up benefits of credit cards, it is undoubted that taking into consideration the difference between credit card and debit card; online shopper prefers the former. However, individuals need to compare the various credit cards available on the Indian financial market before making a choice.

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