Debit cards are no more restricted only to ATM usage; they have now evolved into a versatile payment tool. You can use debit cards for domestic as well as international transactions through POS, online platforms, UPI interfaces, and more. There are many types of debit cards available in the market. So, how do you decide which one to choose?
To start with, let’s first understand the various types of card options available in the market.
Choose a card with the right payment network processor
Different payment network processors (PNPs) such as Mastercard, VISA, Maestro, American Express, Rupay, etc., have their presence in India. When choosing a debit card, you should check how well accepted the PNP is in the region you plan to use it the most. Rupay is operated by the National Payment Corporation of India (NPCI) and has a high level of acceptance pan India. Annual charges on Rupay card are comparatively lower. The other PNPs such as VISA, Mastercard, etc., are operated by international players and have wider acceptance across the globe and come in handy if you’re travelling abroad.
Contactless Vs Regular Card
Nowadays debit cards with features that allow transactions without touching the POS machine are also available. Such cards – called contactless cards – use Near Field Communications (NFC) technology to enable transactions without physical contact or PIN. Contactless cards gained popularity during the Covid period. As per the RBI guideline, you can make a transaction of up to Rs 5000 without entering the debit card PIN.
Adhil Shetty, CEO, Bankbazaar.com, says, “Contactless cards can make it easier and quicker for you when you have to make frequent payments while shopping in the market. On the flip side, as contactless cards don’t require entering a PIN for low-value transactions, if you lose such cards or if they’re stolen, then you may easily lose money. To avoid this situation, you may set a lower transaction limit or turn off the contactless feature in your debit card using the bank’s mobile app or through online banking.”
It’s better to get a contactless card and turn off the feature if you don’t want to use it.
Co-branded Vs Non-co-branded debit card
Like credit cards, there are co-branded debit cards available in the market. For example, you can get a debit card with exclusive benefits on payment for booking a movie ticket, buying flight tickets, booking a hotel room, booking a holiday package, or shopping for your favourite merchandise. Depending on the feature, co-branded debit cards usually offer higher reward point benefits, attractive cash backs, and exclusive discounts from associated brands.
Co-branded debit cards may carry higher charges than regular cards, or their offers may be less generic and aimed primarily on the co-brand. So, they may not be the best option for you if you want to stick to non-branded payments and transactions like withdrawing money from ATMs and for online payments, etc.
How to choose the right debit card for yourself?
When choosing a debit card, you should properly compare their charges and features. Avoid cards with higher charges, especially if their offered features don’t match with your spending patterns. For example, a debit card may offer you benefits related to specific brands, product, or services that you don’t use, so you may not want to opt for such cards after paying a premium annual charge. Check your usage pattern and select a card that supports it.
For instance, if you withdraw cash from the ATM several times in a month, you may prefer a debit card that offers a higher ATM withdrawal limit and greater number of free withdrawals. Some of the exclusive features available on debit card variants are airport lounge access, travel insurance facility, higher shopping limit, lost card cover, personal accident cover, etc. Opt for them only if you are sure they complement your lifestyle and expenses.
Debit cards are usually the first gateway to online transactions like booking flight tickets, hotels, shopping, or spending offline at a specific brand outlet. They can be very rewarding when used rightly. So, choose your debit card carefully in sync with your requirements to make full use of it.