In simple terms, a debit card deducts money from your bank account when you use it to make purchases. It is a widely accepted method of payment worldwide. The biggest advantage of using this type of card is that you never fall into debt – if you do not have sufficient money in your bank account to pay for your purchase, your transaction simply will not go through. If you think you might have a problem with paying your credit card bills, it is advisable to apply for this type of card.
What are the advantages of a debit card?
A debit card allows you to enjoy many of the advantage of a credit card, without the fear of falling into debt due to excessive spending.
• You no longer need to carry around cash or cheques.
• You can avail of online banking facilities like credit card holders.
• Debit cards are accepted at millions of shops and retail establishment outlets worldwide.
• No possibility of getting into debt.
• No constant worry about interest rates, payment due dates, credit limits, paying monthly bills, unlike credit cards.
How to apply for a debit card
You can apply either online or offline. Once you have determined which card you want, you can go to the bank’s website and apply. Alternatively, you can visit the nearest branch of the bank and submit your application and the requisite documents.
What is the difference between a credit card and a debit card?
The big difference between credit and debit cards is whose money you are using when you make your purchases. When you use a credit card, all your purchases are made on your credit card provider’s money. You are simply ‘borrowing’ the money until you pay it in full at the end of the billing cycle. If you make late or incomplete payments, the credit card issuer charges you interest on the money you owe.
When you make purchases on a debit card, you are using your own money. Your purchase amount is taken directly from your bank account. The advantage of a debit card is that you avoid debt because you can spend only what is available in your account. There is no possibility of spending on credit and making a payment later.
Also, since you are spending only whatever money you have in your account, you might not be able to make big purchases using credit, unlike a credit card.
What is a debit card’s safety features?
Debit cards share many of the conveniences and safety features of credit cards. In case of loss of your card or fraudulent activity, you can inform your bank immediately and you will not be held liable for the fraudulent transactions after notification. Many debit cards come with a chip for added security and PIN numbers for ATM use and online banking.