Debit cards became popular in the early 1980s, ushering a slow but sure revolution in the world of banking and finance. Today, after decades of making their first appearance, debit cards remain popular and very much in use. Presently, there's a wide variety of debit cards offered by various banks.
If you're thinking of applying for a new debit card, this post will help you understand the benefits of using one and acquaint you with the different options available.
What Is a Debit Card?
A debit card is a payment card that allows you to transfer money electronically from your bank to pay for purchases instead of using cash. You can also use a debit card to withdraw cash at ATMs and access internet and mobile banking services.
Besides making it convenient to purchase items without physical cash, some banks also allow you to use your debit card to buy big-ticket items and convert the expenditure into easy EMIs for budgeting.
Several debit cards are available in India, issued by various banks, and associated with different offers and discounts. Most banks offer different categories of debit cards as well. Premium cards usually attract more fees and might provide more reward points and other lifestyle features.
Types of Debit Cards in India
Let's get acquainted with the six types of debit cards offered by various Indian banks.
1. Visa Debit Cards
Visa debit cards are quite popular in the Indian market. They belong to Visa, a financial services corporation headquartered in the USA. Enhanced security for online transactions is the main reason behind the popularity of Visa debit cards.
Depending on your net worth and ongoing promotions at your bank, you might also be eligible for a Visa Platinum Debit Card that comes with extra privileges compared to a basic Visa card. For instance, holders of debit cards in the Platinum category can use the 24-hour concierge services provided by Visa to make online reservations and purchases.
2. Visa Electron Debit Cards
Visa Electron debit cards are similar to Visa debit cards, but they lack the overdraft feature. This means that a Visa Electron card must have the funds available at the time of transfer. On the contrary, a Visa debit card generally allows transfers exceeding the available funds up to a specific limit.
For the same reason, Visa Electron cards are mostly issued to younger people or those with poor credit. Some people also prefer a Visa Electron debit card because of the lower fees associated with them. Unfortunately, some online and offline stores may not support this type of card as they cannot check for the availability of funds.
3. MasterCard Debit Cards
MasterCard is another America-based company and one of the biggest card providers in the Indian market. MasterCard debit cards are accepted globally and provide uninterrupted banking services, including a 24-hour toll-free customer service helpline.
MasterCard debit cards are available in several ranges. The card you are issued will depend on your bank as well as the balance you hold. The three popular types of MasterCard debit cards are:
Most banks tend to issue a standard MasterCard debit card when you open an account with them.
Both Visa and MasterCard offer contactless debit cards powered by Near-Field Communication technology (NFC). These cards provide an easy way to make payments by simply tapping the card on a Point of Sale (PoS) machine.
In India, RBI allows transactions of less than INR 2,000 to be processed without a PIN (Personal Identification Number). As a result, many banks have started offering contactless debit cards, which are convenient for small purchases.
5. Maestro Debit Card
All banks in India except ICICI Bank issue Maestro Debit Cards. These cards are obtained from associate banks and linked to their current account. You can use Maestro cards at PoS systems and ATMs, along with contactless payments. Maestro cards also offer good security and global services, making them a popular option.
6. RuPay Debit Cards
RBI launched RuPay debit cards in 2012 in the Indian market to enable risk-free online and PoS transactions. Apart from the leading private and public sector banks, RuPay cards are also issued by the various cooperative and regional rural banks in India.
In addition to affordability, the main benefit of RuPay debit cards is that they're made for the Indian market, and there is scope for personalized service offerings for Indian customers.
Advantages of a Debit Card
Here's a summary of the advantages of using a debit card:
- Online Transactions Made Easy: You can use a debit card to make online payments securely. You can pay bills, shop, book tickets, and reserve hotels from the comfort and security of your favourite screen using your debit card.
- Enable Touchless Transactions: Debit cards allow you to make contactless transactions, adding an extra layer of security during the pandemic. Simply wave your card or pay with a tap using your contactless debit card. They are also useful for online shopping and paying electronically at stores.
- Avoid Overspending: With a debit card, you only spend from what you've got in your pocket. As a result, there's no chance of overspending or falling into a pile of debt.
- Lowered Risk of Theft: If somebody steals your wallet full of cash, the money, in most cases, is gone forever. However, in case your debit card is lost or stolen, you can immediately call up your card issuer to block the card to prevent any fraudulent monetary transactions from taking place.
- Hassle-Free Budgeting: All the transactions made using your debit card - whether money withdrawal or online payments - are recorded in your monthly statement, making it easier to track expenses and make a watertight budget.
Besides these benefits, debit cards have minimal charges associated with them, making them quite popular with the masses for regular use.
How to Apply For a Debit Card Online
Most banks will give you the option of applying for a standard debit card while opening a savings account with them. Alternatively, you can apply for a debit card online with the following steps:
- Visit the official bank website.
- Login to your net banking account.
- Go to the services section (or a similar heading) to find the column for debit cards and apply online.
When you apply for a debit card, make sure you read the fine print to find out what it's going to cost you. The following section will inform you about the regular fees associated with debit cards.
Fees and Charges For Debit Cards
All banks charge a fee for providing their customers with debit card services. Here are some of the basic charges for debit card usage.
- Annual maintenance fee
- Point of Sale fee (usually applied only for fuel-based transactions)
- Card replacement or PIN regeneration fee
- Transaction charges (once you cross a specified number of free ATM transactions)
- Overseas transaction charges (could be a percentage-based or flat fee)
ATM Card, Debit Card, and Credit Card: What's the Difference?
ATM cards, debit cards, and credit cards are payment cards issued by a bank. However, they are different from each other.
For instance, you can use an ATM card only at ATMs to withdraw cash. The card doesn't offer credit, and money is deducted on a real-time basis. On the other hand, debit cards can be used to withdraw money from ATMs, make online payments, and pay electronically at stores. However, debit cards also don't offer you any credit, and the money is deducted directly from your bank account.
Credit cards are different from both ATM and debit cards. While you may use a credit card to withdraw money from an ATM, it will be considered a loan and incur high charges. Besides, you are only eligible for a credit card if you're financially responsible with high creditworthiness.
Once you own a credit card, you can spend up to a pre-decided credit limit in each billing cycle that depends on your income and credit score. However, you must return this money to the lender in the subsequent month, according to your payment cycle, or you'll find yourself paying late fees and high-interest charges.
Frequently Asked Questions
1. How can I use my debit card safely?
A debit card is generally much safer to use compared to cash. Follow these handy tips to improve the security of your debit card transactions:
- Only use secure platforms to make online payments.
- Don't write down your PIN or share it with anyone.
- Register for email and SMS alerts to stay updated about your debit card transactions.
- Don't save your card details on merchant websites.
2. Is it possible to use a debit card as a credit card?
While you can use both debit and credit cards to make PoS and online payments, both cards are pretty different from each other. For instance, when you purchase via your debit card, the money is instantly deducted from your account.
However, you can buy goods on credit up to a limit in every billing cycle in the case of a credit card. The money must be returned on the bill payment date, or you might have to pay hefty charges. You can also avail easy monthly instalments to pay back money for large purchases.
3. What is meant by a debit card PIN?
A debit card PIN (Personal Identification Number) is a four-digit numeric code that adds a layer of security while making bank transactions. Banks provide you with a default PIN along with your debit card to carry out financial transactions. However, you can always change the PIN to a number of your choice.
This is a companion discussion topic for the original entry at https://jupiter.money/resources/guide-to-debit-cards/