Debit Cards

How much is be­ing charged to your ac­count?

Consumer Voice - - Front Page - Subas Ti­wari & Gopal Ravi Ku­mar

13 Banks Com­pared

We all know what a debit card is and how it works. Yet, few of us can say with author­ity that we know ev­ery­thing about this form of plas­tic money. Since it has a direct bear­ing on the credit bal­ances in our bank ac­count, it be­comes im­per­a­tive for us to know the ‘ac­tual work­ing’ of this in­stru­ment and what pre­cau­tions to take to min­imise – if not to­tally elim­i­nate – any ‘frauds’.

Why are debit cards pop­u­lar any­way? Well, for most of us, it is more con­ve­nient to carry a small plas­tic card in­stead of a bulky cheque­book or a large amount of cash. Us­ing a debit card is eas­ier and faster than writ­ing a cheque. Car­ry­ing cash means hav­ing to stuff it in your wal­let (al­ready full with credit cards and busi­ness cards!) and count­ing it ev­ery time be­fore pay­ment, not to speak of the qual­ity of the cur­rency notes you get in re­turn. It’s also a good way to pay for pur­chases with­out hav­ing to pay in­ter­est, as you would if us­ing a credit card. You can use your debit card even to get cash when you make pur­chases at a store (see box on ‘RBI stip­u­lates con­di­tions for “cash with­drawal” at point of sale’).

A debit card looks like a credit card but works like an elec­tronic cheque, be­cause the pay­ment is de­ducted di­rectly from a cur­rent/ sav­ings ac­count. If you use a debit card at a re­tail store, you or the cashier will run your card through a scan­ner that en­ables your fi­nan­cial institution to ver­ify elec­tron­i­cally that the funds are avail­able and ap­prove the trans­ac­tion. Most debit cards are used to with­draw cash at au­to­mated teller ma­chines (ATMs).

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