Why are Credit or Debit Cards so Important

Welcome to card 101, where you are going to learn why credit and debit cards are so important. This will be 360 degrees, an A-Z kind of article where we cover all the aspects of both the credit and debit card starting from the very beginning.


A credit or debit card is known as a payment card which as the name suggests allows you to pay for a transaction without having physical cash with you. So a payment card takes money from your bank account which ends up in the seller’s bank account.
Credit or Debit Cards so Important

Types of Payment Cards

There are two types of cards that can help you make payment without the need to have cash physically with you and these types of payment cards are;
  •        Credit cards
  •        Debit cards

These two cards are essentially the most used online payment methods because they are so flexible to work with. Payments cards such as debit and credit cards can be integrated to so many payment gateways, payment aggregators, payment processors and used to pay and receive money online.

They are just so versatile and useful for buyers, sellers and payment companies. Everyone benefits from payment cards.
credit card importance

Debit Card

Debit cards are payment card that draws money directly from your bank account either a current or savings account when you make a payment. The money charged needs to be present in your bank account before the transaction can go through.

Once a transaction goes through, the exact money is removed from the buyer’s account and held by his bank then after approval, payment is sent to the seller or merchant.

Always remember that with a debit card, you can’t spend more than the amount you already have in your bank account which can be both a good and bad thing.

It’s a good thing because it saves you from going on a reckless shopping spree and it’s bad because it limits your spending.

Example: Let’s say you have N300,000 in your bank account either current or savings and you want to purchase the latest iPhone X which is N350,000 – N400,000. If you are using a debit card, you automatically can’t buy it because you don’t have that kind of money in your bank account.


  • Controlled spending: This is good for people with credit card debt or impulsive buyers who lack any shred of discipline. Using a debit card would force you to only buy what you can afford which is a good thing and to someone else can be a bad thing.
  • No credit card debt.
  • Debit cards are easier to acquire and take less process than credit cards
  • Low fees are attached to debit cards
  • Directly connected to your bank account
  • Easier transactions where tokens, PINS are used for verification
  • Fewer tax payments
  • It can also be used in place of a credit card


  • No loan facilitation for debit card users
  • Strict purchase rule: If you have the money in the bank, you can buy it. If you don’t, the transaction won’t go through.
  • No insurance on transactions
  • Lesser reward opportunities
  • You won’t have access to a line of credit

Credit Card

Credit cards are a shopper’s delight and go-to payment card because it basically allows you buy stuff, makes purchases on credit which means you don’t need to have the money in your bank account right away for the transaction to good through.

A credit card is a card that allows you borrow money in small amounts when making payment at local merchant’s store or business. After you borrow the said amount of money using your credit card, the credit card company charges you an interest on your purchase. There is a grace period of 30 days before the interest is implemented so all you have to do is pay off that payment and no interest charge would come your way.

When you get your first credit card, a line of credit is opened for you and this line of credit is what enables you to borrow money but you would need to keep your credit score above average so the amount you can borrow increases but keep in mind that your credit card balance and payment history can affect your credit score.

Example: You want to buy a Samsung Galaxy S9 and you don’t have enough money in your bank account. You have 75% of the total purchase price and since you use a credit card with a good line of credit (credit card score), you will be able to purchase the Samsung Galaxy S9. Make sure you pay off the 25% you borrowed so you don’t get charged interest.

Some people feel giving people credit card is like giving them loaded guns or a blank cheque. Spend and spend and worry about the cost later can be a good thing but it can also be very misused leading to credit debt, school loans debt, bankruptcy etc.


  • You can borrow money and buy the cool things you’ve always wanted to buy
  • You have access to loans which relies on your credit history so you need to build your credit history and how you do that is by making small reasonable purchases and paying them off in time so interest isn’t charged.
  • As a credit card user, you are entitled to more rewards like cash back,  airline miles, discounts, rebates, gift cards and many others. These rewards are designed to get people hooked on using their credit card instead of a debit card because they won’t want to miss out on the rewards they could get on a given purchase.
  • You get access to a line of credit
  • You get insurance and warranties on products purchased
  • A credit card has fraud/theft protection: In a case where your credit is stolen or lost, you are only responsible for the first $50 unauthorized transactions.
  • There are also legal protection


  • You can be in a lot of debt before you know it. It’s called credit card debt and a lot of people are in this trap. They got their credit card, went on a shopping spree filled with impulsive buying, they forgot to pay for their purchase so interest is charged on those purchases increasing their debt, the same thing happens over and over again which finally racks them thousands of dollars of debt to pay for their lifetime.
  • It takes longer to get a credit card than a debit card
  • You pay more taxes
  • You are liable to more charges and fees

Payment Cards in Nigeria

We currently have 3 major payment cards in Nigeria: Verve card, Mastercard and VISA card. In Nigeria, there is a widespread use of debit cards and some Nigerians still don’t have any idea that credit cards exist, the power it holds and also the dangers that follow if used poorly.
“With great power comes great responsibility”.

Let’s talk about the different cards in Nigeria, their use, advantages and disadvantages and finally recommend the best payment cards for you to use.

Verve Card

The verve card was specifically made for Nigerians and the Nigerian market which means it’s only accepted in Nigeria. This card is the lowest value of payment cards which allows you conveniently pay for goods and services within Nigeria using ATMs, POS, Mobile payment methods.

You can also pay utility bills like your PHCN bills using a verve card and also perform some more functions like buying of airtimes, fund transfer and so on.


  • Easiest payment card to get in Nigeria
  • Cheapest card to get
  • This card works well for the average Nigerian because it takes care of their needs


  • You can’t use a verve card for international transaction online like sending or receiving money either as a buyer or seller.
  • Service charge fees can be as high as N100 per transaction.


The MasterCard came into existence in 1966, it was first called the Master Charge: The Interbank Card but the name was changed in 1979. You can get a MasterCard in Nigeria from the bank that you use and I would recommend this card because it’s accepted worldwide and we all need to have an international and local state of mind where we are above all restrictions.

A MasterCard can be used for transactions in Nigeria using ATMs, POS machines, fund transfer, online shopping, airtime top-up, payment of PHCN bills and so on.

It can also be used on international websites like eBay, Amazon, Alibaba, AliExpress, BestBuy and so on, all giving you access to the international market.

A Nigerian MasterCard is also accepted by worldwide payment methods like PayPal, Authorize.net etc which provides more business opportunities for Nigerians.


  • International transactions
  • More business opportunities for Nigerians and investors to come to Nigeria
  • This card works for the tech-savvy or internet shopper best.


  • It is subject to international exchange rates
  • To obtain a MasterCard, It cost more than a verve card.
  • Subject to foreign terms and conditions
  • Service charge fees can be as high as N100 per transaction.


The VISA card was originally called BankAmericard from Fresno in California 1958 but got rebranded to VISA in 1976.

A VISA card is similar to a MasterCard because they perform similar functions such as Nigerian transactions using ATMs, POS machines, fund transfer, online shopping, airtime top-up, payment of PHCN bills and so on.

It can also be used on international websites like Bluehost, eBay, Amazon, Alibaba, Aliexpress, BestBuy and so on, all giving you access to the international market.

A Nigerian VISA card can also be used PayPal and other international payment methods.


  • Made for International transactions
  • Creates more business opportunities for Nigerians and investors to come to Nigeria


  • International exchange rates would be used when you make an international transaction
  • It’s subject to foreign terms and conditions
  • It cost more to obtain at your bank
  • Service charge fees can be as high as N100 per transaction


Get both VISA and MasterCard from different banks so you pay for Nigerian based transactions while opening yourself to international opportunities. In some international websites, VISA works better while in some MasterCard works but its’ all dependent on your bank that’s why I recommend getting both a VISA and MasterCard from different banks so you can easily bypass bank policies and restrictions and fully enjoy a truly digitalized online transaction.

TechAdvance is a payment application development company with a strategic focus in developing and deploying niche payment companies to serve the needs of large public and private sector organisations in Nigeria.

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