What to consider when deciding on a debit or credit card

In today’s modern world, debit cards and credit cards are some of the tools that have proven to be irreplaceable. However, not everyone knows how to pick the right card for themselves.

Besides, there is need to clearly understand the differences between the two cards as well as their functions before being able to choose a suitable card for yourself.


In simple terms, a credit card allows you to borrow money in order to make purchases. Every time you swipe, insert, tap or use your card online, you’re basically taking out a loan. And if you pay your balance in full and on time after each billing cycle (usually 30 days) you’ll typically avoid having to pay interest.


In contrast, a debit card is usually linked to your checking account. So when you use it to purchase something, you’re using your own money to pay for it. Funds are deducted directly from your account, and you don’t need to worry about stopping by an ATM to get cash.


To help you make a suitable decision for yourself in this directive, Business Times lists the 5 most important factors you should consider before applying for any bank card.

Benefits of each card type

Speaking to this paper, Athanasie Niragira, Head of Marketing and Customer services at Equity Bank Rwanda, said that each card type has its own strengths and limitations, citing that there is need to carefully consider both before making a decision on a suitable card type.

Users of debit or credit cards can easily pay through POS machines. File.

“When it comes to debit cards, this card type will help you to be in control of your expenses as your expenses are paid for by your available account balance. As the amount of money you can use is your account balance, sometimes you can also find yourself in a passive position,” she added.

“But credit cards will put you in more of a proactive and comfortable position when it comes to spending as you do not have to rely on your account balance. However, this freedom in spending can also make you lose control and lead to situations where you might not be able to afford the repayment for your credit limit,” she said.

Income stability

Niragira observes that a client has to consider their income stability to choose a suitable card type.

This she said is easier with debit cards, because the owner can use up to all of their income as long as it is deposited in the account without having to worry about interest or debt.

Alternatively, she pointed out that with credit cards it is essential to carefully evaluate the capability to pay for the owner’s credit limit, as well as fees associated with credit cards such as interest, annual fee, etc.

“If you do not have a stable monthly income, choosing a debit card will be more suitable for you as you would be less tempted to fall into debt.” She said.

Card usage needs and spending habits

Furthermore, Niragira is of the view that it is also critical for a client to consider their card usage needs and spending habits.

“If you are the type of person who wants the convenience of not having to depend on physical cash but do not want to have any outstanding debt, debit cards would be more suitable for you,”

“If you are the type of person with a stable monthly income who likes travelling, shopping and usually has unexpected plans coming up during the month, credit cards can be a powerful enabler,” she noted.  

Billing and grace period

According to Tharcissie Byukusenge, Card Centre Manager at the Bank of Kigali, it is important to know the date on which a credit card statement will get generated and the due date for paying the bill.

“It is generally preferable to make payments two days before your due date to avoid any late payment fees. What a user must try and figure out is if the credit card due date is during the first week of the month. For the salaried, that is when you have a considerable amount of money and making the full payment may be easier,” Byukusenge said.

Interest rates

Most clients look at the monthly interest rate often quoted in the bank literature, “But what you should be looking at is the annual interest rate,” Byukusenge noted.

For instance she said, if the credit card quotes a monthly Interest rate of 3.1 per cent per month, its annualized rate would be 37.20 per cent.

“Banks vary widely in their credit card offerings and across different cards. Some banks charge as less as 1.25 per cent,” she added.

Meanwhile, provided that credit cards create a credit history which is among the factors that are considered when lenders are reviewing loan applications,

“Credit cards should be the most preferable for someone who wants to venture into business,” she added.


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