The latter can be used to pay in shops, withdraw cash, pay for services, make transfers, etc. With a credit card, a bank customer can do exactly the same, but will have an extra amount of money in the form of bank credit. Therefore, he can always expect more than he can currently afford.


A credit card is the same credit product as regular credit

A credit card is the same credit product as regular credit

Using a credit card to pay the borrower will be charged the same annual interest as using a regular loan.

Both categories of cards entered the financial market at the same time, so they have the same rights in the banking offer. Over time, borrowers began to give up credit cards and increasingly switch to debit cards. What is it related to? First, debit card processing is completely free, less expensive in terms of maintenance, and can be obtained by any cardholder, no matter what credit rating they have.

Bank card users are mostly interested in the difference between VISA and MasterCard payment systems. But these payment systems are almost the same, as they have a huge network of terminals and ATMs. However, if you work with PayPal, you can only pay with VISA cards.

These statistics show that when traveling with a Maestro or VISA card, you may face significant restrictions when making payments or withdrawing cash. Also, keep in mind that Maestro and VISA payment systems only offer debit cards .

Debit card

Debit card

A debit card allows you to pay for your purchases or services both in stationary shops and online. To do this, the payment amount is first booked in your account, but later transferred to the company account where you purchased the goods or received the service.

The debit card is most often linked to the client’s bank account where his / her monthly income, such as retirement, comes into. As a result, the debit card holder will be able to pay until the customer’s personal funds are exhausted to the bank account. If there are no more funds on the card, the account must be replenished with cash or wait for the next amount to be credited to the customer’s account. The debit card does not allow you to borrow money from the bank, so the customer has to rely on his own efforts. If you wish to pay with a debit card with no funds left, your bank will decline your request.

There are a variety of debit cards, like credit card offers may provide certain services, such as: discounts for parking. With a debit card abroad, just like with a credit card, you may experience sudden unpleasant situations, as some countries have developed their own debit system and may differ from yours (your country). At present, this problem is partly addressed by international regulation: now bank cards must be of the same size and able to cover purchases or services outside their own country.

And another important difference between a debit card and a credit card: You must have an internet connection to pay with your debit card at the payment institution. This is to enable the billing device to transfer the amount of money specified from the payer’s bank account. With a credit card, things are much easier: the institution debits your card account without an internet connection because the bank has guaranteed your solvency.

Credit card

Credit card

With a credit card, the cardholder can pay at in-store and online stores and withdraw cash from an ATM. To use a credit card, the bank that issued it gives its customer a credit limit. Most often, this amount of money is determined by the client’s monthly income and their credit history . The borrower can pay by credit card every month, but he or she must fulfill the basic condition for using the card: make a monthly minimum payment to the card account for using the credit limit.

The interest rate on borrowing with a credit card is around 10-30% per annum. This amount of commission is more advantageous than fast loans, but you were offered a much lower rate when applying for a long-term loan. In addition to the annual rate, the credit card also provides charges for servicing. On average, this fee ranges from 1 to 10 euros per month or from 10 to 400 euros per year.


Your credit card must be paid back on time

The monthly obligatory payment can be 5-10% of the amount of money used. Often, customers are allowed to repay the credit on the card using a free repayment schedule, which means that the borrower sets his own repayment schedule and credits the money within his means. In this case, a credit agreement must be entered into between the customer and the bank specifying the exact date of full repayment of the credit.

International ISO7810 standards require that any bank card be 85.60 mm long by 53.98 mm wide. Similarly, according to the standard, each card must have everything in the layout prescribed by the same standards. These standards were developed to allow any bank customer to pay with their card or to withdraw cash from anywhere in the world.

Currently, bank cards of various payment systems are available in Latvia: VISA, MasterCard, American Express. Regardless of the settlement system used by one or the other bank, all cards of any creditor fall into several categories , for example: Gold, Platinum, Professional. The category of card available to a particular bank customer will depend on their level of income, and more specifically on the amount of net profit. To receive the most prestigious bank card in Latvia, the customer’s monthly income must be at least 3000 euros (after paying all necessary expenses).

Credit cards from different banks and payment systems will definitely differ from one another to individual loyalty terms , such as free insurance, discounts on in-store merchandise, etc. Most credit cards have a discount period during which you will be able to repay your borrowed money without paying an annual interest rate.