Why carry cash when you have a bank in your pocket? So reasons Citibank which recently launched its debit card in Mumbai and Delhi. The first market to test this plastic variant was Bangalore, where it was launched in March last year. Simply put, a debit card is an ATM (Automatic Teller Machine) card on the move. It provides the user the convenience of a credit card _ no carrying cash while shopping _ plus it affords instant billing. Purchases made by the card holder are deducted or debited from the account immediately, so the spending limit is determined by the amount of money actually left in the bank.
Citibank, the only debit card issuer in India right now, doesn't charge a transaction fee.
What Citi has done is to extend the features available on the Citicard, the ATM card that every account holder gets, so that it doubles up as a debit card which can be used in over 2,000 shops and establishments in the three cities where it has been launched.
Shops that accept debit cards will display a sign that says Maestro (that's the MasterCard debit card brand) outside the door. Present your card as usual to the salesperson who swipes it through the reader. Once you are connected to your account, things get a bit cumbersome _ you need to enter your ATM pin (your secret code number) when `Ent PIN' appears on the screen.
Once the purchase amount is entered by the salesperson and the appropriate keys are pressed, your account will be debited.
A debit card will typically be used for low-value purchases, while credit cards will be used for high-value transactions and charge cards for business use (see table).
Credit cards are built around the revolving credit principle. They enable the card holder to buy goods or services up to an agreed borrowing or credit limit. She also has the option of only paying a percentage of the outstanding every month. She is charged interest that varies from 1
