A customer can use a debit card at online payment gateways and at swipe machine to make purchases. The amount is debited from the account to which it is linked, and the customer those who have activated the SMS service will get an immediate notification of the purchase made.
Although debit cards appear similar to credit cards and share various of the same convenient elements, there are some differences between credit and debit cards that impact on how and where they can be used. Before deciding to get a debit card from a bank, ponder about how debit card transactions work.
Here we will briefly describe how to pick and use debit cards:
Part 1: Choosing and Using a Debit Card
Know the basics: Since a debit card is linked to your bank account, whenever you are withdrawing money, it is directly withdrawing from that account. Moreover, unlike the credit cards, you can’t spend more money if you don’t have it in the account. Debit cards can be used anywhere you desire for making transactions.
Look for a debit card that best suits: The perks, protections, and costs associated with debit cards might vary based on the issuing bank, and it's advised to first do thorough research and compare all the cards before opting for one. Carefully read if there are any fees, such as annual fees and transaction fees, etc, associated with it. At times, banks may also offer rewards for making purchases using a debit card, such as airline miles and cash-back bonuses. So, before settling for one compare the rewards programs offered on all the cards and pick the one best suiting your needs.
Keep tabs on your available funds. When using a debit card, you always need to check how much funds are available in your account before you can make any transaction because debit transactions, especially those done with a PIN, are quickly settled. If you have insufficient funds available in your account while making a transaction, your debit card will be declined. However, some banks do provide overdraft protection coverage with your debit card, so you feel save with this coverage if your card gets declined. Do note this facility might be available at the cost of substantial fees per overdraft transaction. Fintra advice the best way to avoid any hassles as such is to always keep a check on your balances, try not to spend more than what you don't have.
Judge when not to use a debit card. Like how we described above, debit cards can be used anywhere but that does not mean to use them interchangeably with credit cards. Fraud and potential liability is the main concern here. Sines banks offer fraud protection on debit cards, research well about this factor when opting for a card. Fintra suggests to better use a credit card instead of a debit card in the following circumstances:
Outdoor publicly-accessible kiosks
Making payments where the card goes away from your eyesight, such as handing a waitress your card at a restaurant.
Situations in which pre-payment deposits are required, such as at a hotel.
Part 2: Completing a Transaction
Always Remember your PIN: As a security measure, debit cards require a four-digit PIN, a numeric code selected by you, when using the card. Just like any online account passwords, you have to create a PIN which is easy for you to remember, and not easily guessed by others. Moreover, before you can authorize a transaction to happen or to do ATM cash withdrawals with your debit card, you're required to enter your PIN.
Swipe the debit card and enter its PIN (as one option). At a shop or a supermarket, at the time of checking out, the card reader will ask if you desire to pay by “debit” or “credit” after you have swiped your card. When you select “debit,” you will be required to enter its PIN for completing the transaction.
Swipe your debit card and do your signature (as another option). If you don't wish to enter your debit card PIN for making a purchase, you can just do your signature to complete the transaction.