Debit card
Debit card is a “prepaid” or “pay now” card which some stored value. Debit cards quickly debit or subtract money from one’s savings account, or if one were taking out cash.
Every time a person uses the card, the merchant who in turn can get the money transferred to his account from the bank of the buyers, by debiting an exact amount of purchase from the card. To get a debit card along with a personal identification number (PIN).
When he makes a purchase, he enters this number on the shop’s PIN pad. When the card is swiped through the electronic terminal, it dials the acquiring bank system- either MasterCard or Visa that validates the pin and finds out from the issuing bank whether to accept or decline the transaction.
The customer never overspread because the amount spent is debited immediately from the customers account. So, for the debit card to work, one must already have the money in the account to cover the transaction. There is no grace period for a debit card purchase. some debit cards have monthly or per transaction fees.
Debit card holder need not carry a bulky check book or large sums of cash when he or she goes at for shopping. This is a fast and easy way of payment one can get debit card facility as debit cards use one’s own money at the time of sale, so they are often easier than credit cards too obtain.
The major limitation of debit card is that currently only some 3000-4000 shops country wide accepts it. Also, a person can’t operate it in case the telephone lines are down.
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