What is a debit card?

By | March 6, 2011

Debit cards are issued by the banks to its customers. The card allows instant purchase and withdrawal of money from account using ATM’s. Debit cards are different from credit cards in the way they allow purchase based on funds available in the account unlike  credit cards which uses a line of credit that can be repaid later.

Debit cards require a personal identification number (PIN) as a security feature. When withdrawing cash from an ATM or during purchasing, the user will have to enter their PIN for verification. In online purchases, instead of the PIN, users need to enter the three or four digit security code listed on the back of the card. Additional safety measures common for debit cards include a photograph of the card’s owner on the front, or an electronically reproduced customer signature imprinted on the card. Banks offer debit cards for all types of accounts except for the ones opened for the sake of loans such as housing loans, car loans, and personal loans etc.

The biggest advantage of debit card is that a consumer who is not credit worthy and may find it difficult or impossible to obtain a credit card can more easily obtain a debit card, allowing him/her to make plastic transactions rather than carrying cash in hand while travelling or while on shopping

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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