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

27 April 2022

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.

In this article, we will cover the types of debit cards along with their benefits. We will also compare different debit cards to find out which ones are the best in the market.

What Is a Debit Card?

A widely popular form of plastic money, a debit card gives you electronic access to your savings account in 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.

Debit Card vs Credit Card

This is a very fundamental concept that you should definitely be aware of.

There is a fundamental difference between the two. Debit cards use the money existing in the bank account of the cardholder.

The credit card, on the other hand, is a type of loan/credit extended by the bank. It is like borrowing money from a bank and replaying it after a stipulated time. The difference no interest is charged on timely repayment of the amount borrowed by the use of a credit card.

Benefits of Debit Cards

With access to ATMs almost anywhere, debit cards provide, access to instant cash.

It also aids the merchants in swiping the debit card on a Point of Sales (PoS) machine, eliminates the need to handle a large amount of cash, and saves associated costs involved.

Banks incentivize the usage of debit cards by offering various rewards such as cashback offers, bonus points, free movie tickets, and much more.

Contrary to cash in hand, usage of debit cards helps in keeping a track of your expenditures. They offer useful features like email and SMS alerts with the details of each transaction made.

Contrary to a credit card, it encourages responsible spending behavior. You can only spend the money that is already there in your savings bank account.

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

Debit Card: Fees and Charge

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.

2. 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%.

3. 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.

4. 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.

5. 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.

6. 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.

Types of Debit Cards

In this section, we divide the debit cards into various types on the basis of the technology used, usage, and payment platform. Let us have a look at the various types of debit cards.

1. Prepaid Debit Card

Unlike the common debit cards, a prepaid debit card is not linked to your savings bank account. In order to use this debit card, the cardholder first needs to load money into the card.

2. International Debit Card

An international debit card is one that can be used to conduct transactions overseas. Not only this, this card can also be used to withdraw money at international bank ATMs. It is important to know that upon overseas usage, an extra charge called Foreign Exchange mark-up is levied.

3. Virtual Debit Card

As the name clearly suggests, these are not physical debit cards.  By the word virtual, it means that this card can be accessed via phone or internet for making online payments.

4. Business Debit Card

This card is issued only to corporates for business usage. Moreover, the usage of this card is subject to the terms and conditions as well as the policies of the company.

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’t related to the usage of the debit card-


1. 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.

2. 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.

3. Keep Tracking Your Money

Bank account statements should be checked and the account balance should be verified at regular intervals. It helps track the usage of funds as well as any charges that might have been levied by the bank.


1. 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.

2. 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: Top Mentions

Let us have a look at a few of the best debit cards:

  • ICICI Bank Coral Debit Card

It comes with various exciting benefits such as payback points, access to the airport lounge once every quarter, 1+1 on movie tickets at Bookmyshow, fuel surcharge waiver, and much more.

  • SBI Classic Debit card

Classic Debit Card by SBI is a unique debit card with zero insurance fee and only ₹ 125 + GST annual maintenance charges.

It offers a daily cash withdrawal limit of ₹ 20,000 (5 free ATM transactions monthly) and purchases limit of ₹ 50,000. Cardholders can earn Freedom Reward points.

  • 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 ‘contact-less’ 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.

  • HSBC Premier Platinum Debit Card

A unique feature of this card is a very high daily cash withdrawal and purchase limits of ₹ 2.5L each.

Moreover, users must be aware that this card has a lost-card liability of ₹ 1,00,000 and an accidental insurance cover of ₹500,000. It also provides a host of other privileges and benefits.


Debit cards have become an integral part of most of our day-to-day lives.

Responsible and efficient use of debit cards brings about a lot of convenience to our transactions. It is very easy to carry and use and is accepted in most places via Point of Sale (PoS) machines.

The fundamental feature of a debit card is that it debits the money directly from the cardholder’s bank account. This is what differentiates it from a credit card.

Users can select a variety of debit cards as per their needs and convenience. They come with a lot of interesting benefits and rewards.

Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww.

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