Advantages and disadvantages of having a debit card

Debit cards are one of the most popular instruments these days for cashless transaction. You can use the cards at both retails and online stores for any transaction. You can also use the same card to withdraw money from the ATM. But are there any disadvantages of using a debit card? Here’s what you should know.

 

Advantages of debit card

There are several advantages of a debit card.  The key advantages are as follows:

Debit card can be easily obtained: When you open a savings or current account, most banks issue a free debit card. Make sure that you fill in the necessary documentation to receive your debit card.

Very convenient to use: One of the advantages of a debit card is that it can be swiped for transactions as well as withdrawal of cash from ATMs.

No more debts:  When you have a credit card, you are more likely to make impulsive purchases. But a debit card keeps you in check as it is linked to your bank account. You are only able to spend the amount that is in your account. You don’t have to worry about the mounting credit card bills anymore.

Easily accepted: Debit cards are accepted widely all over India and at international destinations. Make sure to authorise international transactions by simply calling your bank. These debit cards can be used for cash withdrawal at international ATMs too. So you don’t have to carry cash with you when you are travelling.

Earn rewards: Offers are not restricted to credit cards alone. Using your debit card too can help you gain rewards and cashbacindia offers. Several online and retail outlets offer cashback offers for every purchase made on the debit card. The points can be redeemed at any time to either purchase products from an online catalogue of the bank or to earn shopping vouchers from various brands.

 

Disadvantages of debit card

There are certain disadvantages associated with using a debit card:

No credit allowed: A debit card is linked to your bank account. There is no possibility of making any transaction on credit. All transactions and withdrawals are limited to the balance available in your account.

Difficult to dispute fraudulent use: It is easier to fraudulently use your debit card. In case someone steals the details of your card, especially the PIN and CVV, the chances of a fraudulent transaction are very high. It is difficult to dispute such transactions with the bank.

Additional fees on ATM withdrawals: Every bank offers you a limited number of free ATM transactions and other non-financial transactions per month at the branches of other banks. Once you exceed the limit of free withdrawals/ non-financial transactions, fees are levied.

 

Components of a debit card

A debit card has the following details:

The card number: this is a 16- digit number. The card number is unique and is not the same as the bank account number.

The issue and expiration date: The issue date is also printed in the MM/YY format. The expiry date is also printed in the same MM/YY format.

The Logo: The card has the logo of the bank that has issued it. It also has the logo which determines the type of debit card it is: Visa, Mastercard or RuPay logo.

Customer service number: The toll-free number is printed on the back of the card. You can call this number in case of any questions or to report the loss or theft of your card.

The signature bar: A signature bar is provided on the back of the card. It is important that you sign the bar as soon as you receive the card. This can help you to prevent fraudulent transactions. Some merchant retail outlets do not swipe the card unless the signature is verified.

CVV number: Also known as the card verification value number, the CCV number is unique to every debit. This number needs to be provided at the time of making online payments.   It provides an additional layer of security to the card.

 

FAQs

I have multiple savings accounts in the same bank. I would want my debit card to be linked to multiple accounts. Is that possible?

Some banks allow multiple accounts to be linked to a single card. Check with your issuing bank if this is allowed.

I forgot my PIN. I entered the last remembered PIN a couple of time but it was incorrect. I have got a message from my bank that the card is blocked. What is the reason for this?

As a security measure, a bank will block your debit card if you enter the wrong PIN number three times in a row. This measure ensures that the card is not being misused. It is possible to unblock the card by calling the customer care number and authenticating your identity. However, ensure that you reset the PIN. Make sure to not write it down or share it with others. PIN is confidential information.

Can I avail an overdraft facility on my debit card?

Certain debit cardholders may enjoy an overdraft facility. The overdraft is provided to the savings or current account you have with the bank. You can check with your bank if this facility is available for your card/account.

I do not have a good credit score. Am I still eligible for a debit card?

A debit card is issued when you open a savings or current account with a bank. Your credit score does not have any bearing on a debit card. Even with a bad credit score, you can have a debit card.

Do I have to pay any charges for using my debit card?

Banks typically charge you some nominal fees for using your debit cards. This includes card issuance fees, annual maintenance fees as well as ATM charges for exceeding the limited free monthly ATM transactions as provided by your bank.

I do not use my debit card frequently. What charges do I need to pay to the bank?

Annual maintenance fees are charged by every bank. This is irrespective of the usage of the card.

What is the biggest advantage of a debit card?

A debit card instils financial discipline. As it is linked to your savings account, you cannot overspend. There is no provision of making any purchases on credit.

Can I state my preference with regards to the type of debit card issued to me?

When you fill the debit card request form, you can choose from the various payment systems associated with the bank. If you travel abroad frequently, you must opt for Visa or MasterCard debit cards. These cards are accepted globally. If you undertake domestic transactions only, the RuPay debit card could be a good fit for you.

Can I obtain a personalized debit card in India?

Most banks in India offer a personalized debit card. The photograph of the user is also printed on the card. This is in addition to the basic details included in a debit card. Photograph is included as an additional protective measure. It can help to prevent fraudulent transactions.

I have noticed that banks are issuing chip-based debit cards instead of magnetic strips. What is the reason?

A chip card has a microchip embedded in the debit card. It is very difficult to tamper with a chip. This is an additional security measure. A chip-based card can prevent fraudulent transactions from taking place. As per the present RBI guidelines, it is mandatory for all banks to issue chip-based cards.

What is a PIN for a debit card?

PIN stands for personal identification number.  When a debit card is issued to you, the bank provides a PIN.  You are allowed to change your PIN. Any transaction using a debit card needs to be authorized with the PIN. This helps to prevent unauthorized transactions.

It is important to remember that PIN is your personal data. It should not be shared with others.