How do credit cards work?
Although credit cards are often thought of as a piece of plastic, in reality they’re a credit facility with a prearranged limit. You can spend up to this limit and pay it back at a later date. All the purchases you make accumulate on your account. You’ll then get a statement each month stating your minimum repayment amount.
You can either pay off what you owe on each month by the due date on the statement, or you can pay the minimum amount on the statement and make repayments over a longer period whilst interest accrues on the balance. Some credit cards can have an interest-free period attached; otherwise you’ll pay interest on the outstanding amount. That means the sooner you can repay what you owe, the less interest you’ll pay on the outstanding amount.
Are credit cards and debit cards used the same way?
Credit cards and debit cards operate with similar functionality. That means if you’re paying for groceries at the supermarket, you’ll either tap your card (for a contactless payment) or swipe and use your PIN number the same way whether you’re using a debit card or credit card.
What about security?
If you’re using a Westpac debit Mastercard®, you’ll have the same security protection that you’d get if you were using a Westpac credit card. This includes the Westpac Fraud Money Back Guarantee2 which ensures that any unauthorised transaction claims will be reimbursed provided that the cardholder hasn’t contributed to the loss and has reported it to Westpac promptly.
With both Westpac credit card and debit cards you’ll also get chargeback protection, which may reverse transactions if you’ve been overcharged or don’t receive the goods you’ve paid for. Find out more about this here.