Gift Card vs. Credit Card

Difference Between Gift Cards and Credit Cards

Most people often make the mistake of assuming that Credit Cards and Gift Cards are the same. Most of the time, unknowing individuals believe that both are used in similar ways. However, upon close examination, gift cards and credit cards display apparent differences from one another.

Gift cards, as the name implies, are used as substitutes for real gifts. Instead of sending the actual gift, some people find it more convenient to send gift cards instead. Let’s take for example you want to send a friend a new set of books. Instead you send him/her a gift card for books which he/she may claim from a nearby bookstore or from a certain place you’ve determined beforehand. That makes delivery easier and the claiming of the gifts more fun and personal for your friend.

Credit cards, unlike gift cards, are used to purchase personal objects like clothes, groceries and others on credit. With a credit card, there is no immediate need to pay using actual cash when purchasing your goods, be it online or offline. The company who issued your credit card, often a credit organization or a bank, will pay for your purchases as of the moment.

You will have to remember though that you will have to pay your credit card company later. That includes a small interest for your repayment period. A bit of interest will also be charged on what the company paid to all the outlets where you bought your goods after a specified  amount of time. Usually, repayment time does not exceed 30 days after the purchase date.

A credit card comes with a small interest while a gift card just means you’ve paid in advance the exact amount for the goods it was meant to purchase. This is one of the major differences between credit cards and gift cards.

One other obvious difference between the two is the fact that credit cards can be used almost anywhere, be it online or offline, including ATM booths where you may withdraw cash, while gift cards can only be used in specific stores or outlets where they were meant to be used. Credit cards do come in handy, but one should watch out when using them, lest he/she gets buried in debt.