Debit Card is a way to make purchases in place of cash and as technology is advancing very rapidly, It’s better to use Plastic money instead of paper money. There are various types of cards available in the market issued by financial institutions to their consumer, but most importantly two are there known as Debit Cards and Credit Cards. We will discuss each card in detail.
Debit cards are the cards used by the consumer against his or her saving account that means the consumer must have a saving account with that bank to have its debit card. The debit card is also issued to corporate entities against current accounts in the bank. When you swipe your Debit cards for purchases at the POS terminal, money gets deducted from your deposit account instantly.
By using these cards for making a transaction, its not possinle for consumer to go in debt i.e consumer can purchase to the amount he holds in his saving account. exception for this occurs when consumer is using is using overdraft facility against his account but for that there are documents must be sugned by cosumer first. So first let us understand what is Saving and Current account in the bank.
There is a difference between ATM Cards and Debit Cards as ATM cards have only one feature that can be used to withdraw cash from ATM Machines, while the Debit card can be used for withdrawal as well as Swiping purposes. A debit card can be a good step towards your goal of personal finance because here by using plastic money you can trackback your transactions easily which is not possible with cash transactions.
👀👀Saving Account :
It is a deposit account which permits limited transactions, and most suitable for people who are salaried employees or have a monthly income. Savings accounts earn interest at a rate of around 4% per year (ROI is subjected to change quarterly). The minimum balance required to maintain a savings account is usually very low.
It is meant for daily transactions, and suitable for business personals who use to access their accounts frequently. The current Account has no interest in a deposit account and the minimum balance requirement in the case of the Current account is much higher as compared to saving the account.
👀👀An overdrawing/overdraft facility
It is one in which individuals can withdraw more money from the account than it actually has in accounts, and this facility is offered only with a Current Account and not with a saving account.
👉👉Types of Debit Cards:
It depends on the type of platform for payment linked to the card.
It is a mostly used and popular type of debit card for online and electronic payments connected with the International visa payment system and issued by banks. The transaction is secured by a verified visa platform system. This card also has an overdraft facility. There are different types of Visa cards like Platinum visa etc.
👍Visa Electron Debit cards
These are the same as Visa cards but these cards did not have an overdraft facility associated with them.
👍Mastercard or Maestro card
It is the most widely used card and the cardholder can access funds across the globe via MasterCard secure platform.
👍Contactless Debit Card
Using this card, payment can be made just by tap or wave of the card on the POS terminal so making payment safer as it is based on Near Field Communication Technology (NFC).
👋👋What is NFC (Near Field Communication) :
It is a short-range wireless connectivity standard that uses magnetic field induction to enable communication between devices when they’re touched together, or brought within 4 centimeters of each other.
👍RuPay Debit cards
It is introduced by India as a Domestic card under NPCI and payment is accessed by National Financial Switch Network.
👴👴Salient Features / Advantage of Debit Cards
a) Can be used as ATM cards for transaction at ATM machines
b) Additionally can do online transactions plus can swipe at PoS terminals
c) It requires 4 digit PIN to complete transactions
d) It is linked to saving or current account of the customer so a real-time deduction of money from the account
e) No credit facility exists on debit cards
f) It removes the need to carry cash while shopping as it can be easily swiped for the purpose.
h) Debit Card comes with a daily transaction limit, above that limit a consumer can not purchase.
i) Debit Card offers lucrative reward programmes for shopping with card against its use limit.
j) Any transaction made using Debit Cards can be easily tracked as it reflects in the account statement of holder, but is not possible in case of Cash transacions.
k) Purchase using Debit Cards are normally chaeaper as compared to usage of Credit Cards for same purposes.
l) It is issued free by the bank against saving/current account.
👀👀Safety guidelines for first-time user
a) Please keep your PIN and don’t disclose it to anyone
b) Don’t disclose PIN and other info to bank personnel as well because they will not ask for it and if someone is asking posing self as bank representatives that means you are talking to a fraudster so be aware
c) Don’t leave ATM counter if your transaction is not complete and press cancel every time
d) Use ATM privately
e) Break the card and dispose of it, when not in use
f) Keep changing your PIN from time to time
g) Register for SMS/Email Alerts
Details printed on Debit Card
a) 16/19 Digit Unique card number which is diffrent from your bank account number.
b) Name of Card Holder imprinted in the card itself.
c) Month and year of issue and expiry of debit card.
d) Logo of the issuing bank and card provider company both.
e) Magnetic strip on the rear side.
f) Space for signature of customer.
g) CVV which is 3 digit number printed just adjacent to magnetic strip end and it is an extra security feature added to your debit card by service provider. You have to enter this CVV number each time making online transactions.
h) Customer service Helpline number.
Debit cards have no annual fees and also can be easily procured from the bank. But these cards also have some negatives as compared to Credit cards and those are like less protection, no cashback, fewer reward points, no credit score maintenance, etc, and finally and most important is that debit cards are more prone to online frauds.
Also once any fraud detected with the Debit Card, money gets deducted from consumers acccount instatntly while in case of Credit Card you have some buffer zone to react and lodge a complain for fraud.