A debit card is a payment card that can be used to withdraw money from a bank account. Debit card is also commonly known as ATM card. It is linked to the customer’s savings account. Debit cards can also be used to digitally purchase goods or services. Its eliminate the need to carry cash with you.
A PIN (Personal Identification Number) is also kept with the debit card. Although the purchases can be made with or without this PIN, but cash cannot be withdrawn from an ATM without a PIN.
Debit cards usually have a daily purchase limit, meaning that a person cannot make more than a certain limit with a debit card. There is also a daily limit on cash withdrawals from it. Both these limits vary from bank to bank and with different types of cards
Number of transactions
The number of transactions from ATMs of the bank having the debit card is more than the number of transactions from ATMs of other banks. If this number is exceeded, a fee must be paid. Charges may be levied if you withdraw money from an ATM via debit card and do not have sufficient balance in the account. If a debit card linked to an account is lost, stolen, or damaged, another debit card is found in the same account. However, you have to pay some fee for this.
Debit cards should be blocked immediately if they are stolen or lost. This can also be done online with the help of internet banking.
Advantages of Debit Card
Online payments have changed the landscape of traditional payment methods. Nowadays transactions are easy, fast and hassle free – all thanks to the debit card. Due to the features offered by debit cards – spending money, paying bills and shopping experience is becoming easier than ever. Learn more about the unique benefits of using a debit card in your daily life. Debit cards are very easy to use and have their own advantages such as-
1. No annual fee –
Most banks have no annual fee, although sometimes a small amount can be deducted as service or maintenance fee. Fees may vary from bank to bank. For example – SBI Classic Debit Card Charge Rs. 125+ GST for annual maintenance.
2. No interest charge –
unlike credit cards, debit cards have no interest charges because the money is debited directly from your bank account.
3. Security –
These are quite secure because you need to enter the pin code before each transaction Also, most banks offer 24×7 customer service. In case of loss or theft, you can immediately contact your respective bank and block the card.
4. Easy to use –
Since debit cards are directly linked to your bank account, you can easily withdraw money from any ATM.
5. Budget practice-
With a credit card you can buy anything, even if you don’t have the money. But with a debit card, you have a limit because you are spending directly from your bank account. So it always sets a user limit before swiping the card.
6. No interest, No Points
One of the advantages of Smart Choice Debit Card is that there is no arrears, no interest rate, no credit points, whatever you spend in your bank account. So, debit card is definitely a smarter choice than credit card.
7. EMI Options –
Initially, there was no EMI option available on debit cards, but recently, e-commerce sites are offering debit card EMI shopping options, where you can buy some items at EMI and make monthly payments through your debit card.
However, it can attract certain interest rates. Note- Sometimes some ATM machines charge a small amount during withdrawal. This usually happens when you withdraw cash from another bank’s ATM or when you exceed the withdrawal limit. So it is advisable to check before withdrawing money.
There are some guidelines to follow when using a debit card.
- Make sure the Personal Identification Number (PIN) is not disclosed to anyone because it has direct access to your bank account.
- To avoid any fraudulent activity, make sure you do not share your PIN with anyone.
- Also, it is important to check that the Card Verification Value (CVV) number is not disclosed when you are in public.
Difference between Credit and Debit Card
Although you can make purchases or make payments with both debit and credit cards, since the debit card is linked to your savings or payroll account, purchasing with a debit card deducts money from your account.
Where credit card payments are deducted from your credit card, you have time to pay and this amount is later deducted from your debit card. According to HDFC Bank, these are the differences between debit and credit cards.
1. Credit limit
Depending on your card, the credit card will have a limit, it can be 1-2 lakhs or more. With it, you can only shop up to a certain limit, but later you have to pay that amount, but you can use up to the savings limit on the debit card.
2. ATM withdrawal
Withdrawal of cash from a credit card attracts withdrawal fees and interest. On the other hand, there is no charge for debit card withdrawals. However, both cards have a daily withdrawal limit. However, credit cards have a monthly withdrawal limit.
3. Interest
If you do not make the credit card payment after 50 days, you may face penalty or interest. Where you do not have to pay any interest on the debit card.
4. Annual fee
There is no annual fee for debit cards, but for some credit cards, the bank charges an annual fee.
5. Advantages
Debit cards give you benefits ranging from discounts to cashback on online shopping, but with credit cards you get many benefits, including cashbacks, discounts, rewards, which you can convert to enjoy flight tickets or other gifts.
6. Security features
The security features are the same for both debit and credit cards. For online shopping or to make some payments from both the cards, OTP, SMS Notification (SMS) or PIN number is required.
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