Debit Card: Benefits, Types, Best Debit Cards and More

29 July 2022
11 min read

A Debit Card is a popular type of money that many of us carry with us. As digitization has increased rapidly over the past few years, plastic and electronic money have become very famous. A Debit Card is one of the most popular and widely used forms of plastic money.

When it comes to a cashless society, Debit Cards are your pals. You can avoid carrying rolls of cash with you wherever you go by using this. Almost as simple as using cash, using a Debit Card is more secure and safer. They are useful anytime and anywhere.

Debit Cards are compatible with a variety of mobile payment systems, including Apple Pay, Samsung Pay, and Google Pay, as well as with cash registers, ATMs, and numerous money transfer apps, including Venmo and Cash App.

In this blog, we've put together a comprehensive overview of Debit Cards, along with all the essential details about them that everyone should be aware of. Continue reading to discover the wonders of a Debit Card!

What is a Debit Card?

Debit Card Definition – A Debit Card is a very common type of plastic money that gives you electronic access to your savings account at any bank.

The access is generally via ATMs. If you swipe your Debit Card to pay a bill in a restaurant. Now, the concerned amount can only be used if it is already there in your bank account at the time of swiping the Debit Card. This is contrary to Credit Cards, where money can be accessed in advance and paid later.

These days, a debit card is readily offered at the time of opening a new savings account, even without applying for one.

There are four major issuers of Debit Cards around the world – American Express, Discover Card, Master Card, and Visa. Some of the country-specific Debit Card issuers are - UnionPay in China, RuPay in India, and Maestro in the United Kingdom.

How Are Debit Cards Beneficial? Let’s Find Out

  • Debit Cards give you access to instant cash because they are almost universally accepted at ATMs.

  • Additionally, it reduces costs associated with handling large amounts of cash and helps merchants swipe Debit Cards on Point of Sales (PoS) devices.

  • Banks encourage the use of Debit Cards by providing a range of incentives, including cashback deals, bonus points, free movie tickets, and more.

  • Using Debit Cards, as opposed to carrying cash, makes it easier to keep track of your spending. They provide practical features like email and SMS alerts with information on every transaction that is made.

  • In contrast to a Credit Card, it promotes frugal spending. Only funds that are currently in your savings bank account may be spent.

  • Unlike in the case of a Credit Card, here you cannot spend in advance and thus it reduces the risk of irrational spending.

Types of Debit Cards in India

In this segment, we categorize Debit Cards according to their technology, usage, and payment platform. Let us examine the various types of Debit Cards.

  1. Visa Debit Cards

A Visa card is a payment card that is branded by Visa and operates on the Visa network. The company started out only with Credit Cards, but it has since expanded to include debit, prepaid, and gift cards as well. Despite the fact that Visa cards bear the Visa logo, they are not issued by the company.

  1. MasterCard Debit Cards

Debit Mastercard is a Debit Card brand offered by Mastercard. They use the same structures as standard Mastercard credit cards, but they do not provide the customer with a line of credit, instead relying on funds in the customer's bank account.

  1. RuPay Debit Cards

Rupay Card is a domestic Indian card created and initiated by NPCI in 2012. This card was launched in the Indian payment strategy to eliminate the monopoly of foreign gateways such as Visa and MasterCard because these are foreign or American companies with high commissions, resulting in a high transaction cost.

  1. Contactless Debit Cards

In a wireless financial transaction known as contactless payment, the customer approves monetary payment for a purchase by placing a security token close to the point of sale (PoS) reader of the merchant. Chip-enabled bank cards and smartphone digital wallet apps are common security tokens for contactless payments.

Other names for contactless payments include touch-free, tap-and-go, and proximity payments. Frictionless checkout is the term used to describe a transaction in which goods or services are purchased using contactless payment.

  1. Maestro Debit Cards

Mastercard offers Debit Cards under the Maestro brand. Both in-store and ATM cash withdrawals are possible with Maestro cards. Based on the associated bank, the majority of Maestro cards also support online transactions.

Credit Card Vs Debit Card

It is important for you to understand this very basic concept. There is a key distinction between the two.

Credit Card

Debit Card

Credit Cards are borrowed funds issued by banks.

In Debit Cards, the money is subtracted from your bank account when used.

In Credit Cards, interest rates and fees range and differ.

In Debit Cards, there are no interest rates.

Credit cards can provide benefits such as rewards, discounts, and travel points.

Debit Cards can help you avoid debt accumulation.

Excessive compulsive spending through Credit Cards can lead to debt.

Debit Cards do not really assist you in building credits.

Debit Cards access the funds held in the cardholder's bank account. On the other hand, a Credit Card is a type of loan or credit given by a bank. It is comparable to taking out a bank loan and paying it back over a set period of time.

On timely repayment of the amount borrowed using a Credit Card, there is no interest to be paid.

Fees & Charges Associated with Debit Cards

All banks charge some fees for providing the services of a Debit Card. As a Debit Cardholder, it is important to know the various charges that could be levied on the usage of the debit card. Some of the common charges associated with Debit Cards are:

  1. Annual Maintenance Fee

As the name suggests, annual maintenance is an annual fee charged to the customer for using the Debit Card. It could range from ₹ 100 to ₹ 500 in most cases. However, this charge varies from bank to bank and also depends upon the type of Debit Card.

  1. POS Fee

This is a unique charge for fuel-based transactions. Usually, no extra charge is levied upon the cardholder for making purchases through the Debit Card. However, only in the case where the Debit Card is used for fuel-based transactions, an extra surcharge is levied at the rate of 2.5%.

  1. Card Replacement Fee

As the name suggests, a card replacement fee is charged for replacing your Debit Card with a new one. The charge for the replacement of the debit card may vary from one bank to another. It also depends upon the relationship of the bank with the client.

  1. Duplicate PIN or Regeneration of PIN Fee

This charge is levied in case the cardholder forgets his/her PIN. A duplicate PIN is sent to the client (either electronically or physically) and a nominal fee is charged for this service.

  1. Transaction Charges

Different banks have different policies as regards levying charges based on a number of transactions. Usually, the transactions made on the same bank’s ATM are free.

However, there is a certain limit on the number of free transactions per bank from other banks’ ATMs. A nominal charge is levied per transaction, in case the specified number of free transactions is crossed.

  1. International Transaction Charges

As the name suggests, international transaction charges are levied on using the Debit Card for cash withdrawal in foreign countries. Varying from one bank to another, these charges may be percentage-based or a flat specified transaction fee.

Do's and Don’ts of Using a Debit Card

Debit Cards use technology to facilitate paperless transactions. However, everything related to technology comes with the risk of misuse or fraud. In this regard, special care needs to be taken as to the usage of the debit card.

Let us have a look at some of the fundamental yet important do's and don'ts related to the usage of the Debit Card-

DO’s of Using a Debit Card

DON’Ts of Using a Debit Card

Report Loss of Your Card – In case you lose your Debit Card, you must immediately report the loss of the card to the concerned bank. The second step is to stop all transactions from the concerned card and block the card from future misuse.

Don’t Use Unsafe Online Platforms – Don’t use your Debit Card on websites that are not authentic. Many websites are made for the sole purpose of extracting your personal account details (including PIN) and stealing money from your account.

Follow SMS Alerts – It is advisable to set up SMS alerts for each transaction made using the debit card. This will ensure safe usage as well as help you track your Debit Card spending.

Don’t Cause any Physical Damage to Your Debit Card

Mishandling of the Debit Card could destroy or harm the magnetic stripe or the chip in your Debit Card. A common example is an exposure to sharp objects or magnetic materials. The physical damage can harm the technology in the Debit and render it useless.

Best Debit Cards in India

Let us have a look at a few of the best Debit Cards:

  1. ICICI Bank Coral Paywave International Debit Card

The ICICI Bank Coral Paywave International Debit Card is one-of-a-kind and a revolutionary Debit Card that allows you to make faster and contactless payments. It also promises to provide superior value through exciting shopping, entertainment, and other features.

The Coral Paywave Debit Card unlocks a world of convenience, security, and speed. This Debit Card is thus regarded as the best debit card as of now.

  1. HDFC Bank RuPay Premium Debit Card

The HDFC Bank RuPay Premium Debit Card is packed with features and benefits that allow you to save money no matter what you spend it on. When you use the card to pay your dreaded utility bills, you will receive a 5% CashBack and a 1% Fuel surcharge waiver. The card provides you with a Personal Accidental Death/Permanent Disability cover worth up to Rs. 2 lacs.

The RuPay Debit Card is intended for use on Indian websites, merchant outlets, and ATMs. It is not intended for international use; therefore, if you want a card that can be used internationally, you must go to a bank branch and request a Visa / MasterCard Debit Card.

  1. Kotak Bank PayShopMore International Chip Debit Card

The Kotak Bank PayShop More Debit Card is a visa card and one of Kotak bank's most customer-friendly and beneficial debit cards. The card allows you to shop conveniently and cash-free at over 30 million stores in India.

The card can be swiped smoothly on both websites and mobile apps. Furthermore, you can use your card for shopping even when travelling abroad. 

  1. Axis Bank Burgundy Debit Card

This premium Debit Card by Axis Bank provides its users with higher daily withdrawal and purchase limits. Moreover, it provides a new ‘contactless’ feature for a faster and safer shopping experience.

It is one of the selected few cards that allow free ATM withdrawals from any bank’s ATM, around the world. Not only this but this Debit Card also provides complimentary movie tickets and access to exclusive airport lounges.

  1. SBI Platinum International Debit Card

The Platinum Debit Card from SBI is available in Visa and Mastercard versions. Aside from the convenience of cashless transactions and ATM withdrawals, the card provides numerous benefits to customers. The card also includes a 5-lakh insurance policy. The State Bank of India Platinum Debit Card provides customers with access to cashless transactions and ATM benefits.

The card is issued in collaboration with either VISA or MasterCard. This debit card is ideal for heavy spenders due to its high transaction and withdrawal limits. Cardholders can earn reward points while shopping through the State Bank Rewardz Scheme. This card is another card that is regarded as the best Debit Card in India.

Conclusion

Debit Cards have become an essential part of our daily lives. The responsible and efficient use of Debit Cards greatly simplifies our transactions. It is very portable and simple to use, and it is accepted in most places via Point of Sale (PoS) machines. A Debit Card's primary feature is that it Debits Funds directly from the cardholder's bank account.

This is what sets it apart from a credit card. Users can choose from various debit cards based on their requirements and convenience. They come with a slew of intriguing advantages and rewards.

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