Are you someone who prefers cashless transactions for daily expenses? If so, you might already be aware of the convenience debit and credit card offers. However, it is essential to note that both plastic types have unique features. While credit cards often come with rewards like points and cashback, you might not be aware that debit cards can offer similar perks. Keep reading to learn more about What is debit card and its benefits.

The Key Differences Between Credit and Debit Cards

Debit cards may look similar to credit cards, but they function differently. While some debit cards offer reward programs, they are not a form of borrowing money like credit cards. Debit card transactions are immediately paid for using funds from your bank account, while credit card purchases are paid for by the credit card company and then billed to you with interest if not paid back in full. 

A Kotak 811 debit card doesn’t put you into debt and limits your spending to the amount in your account. Credit cards are a better option for financing large purchases.

Benefits of Using a Credit Card

The Convenience of Cashless Transactions

Debit cards are widely accepted by most retailers, venues, and service providers, making them a convenient way to complete purchases without needing cash or a chequebook. Additionally, you can easily access your funds and withdraw from ATMs without going to the bank.

Enhanced Security Measures

Debit card issuers continuously improve the security features of their cards to keep your funds safe. Embedded microchips create dynamic data almost impossible to counterfeit, providing peace of mind while conducting transactions.

No Incurred Debt or Interest Charges

Since debit cards deduct money from your checking account, you do not accumulate debt. Also, checking accounts do not charge monthly interest because you are not borrowing from a lender. You have direct access to your account.

Low or No Fees

As banks compete for customers, they often eliminate checking account fees. The monthly maintenance fee can be waived by meeting the minimum balance requirement, and ATM fees from other banks can be restricted by reading the terms of service or contacting your bank.

Accountable for All Spending

All transactions are recorded using your Kotak 811 debit card, allowing greater transparency in spending tracking. Most banks offer online portals or apps, enabling you to monitor your account status in real time.

Helps You Stick to Your Budget

Tracking your spending through your debit card can increase your awareness of where your money goes, revealing areas where costs can be cut. You can easily view your checking account balance to help you maintain your budget.

Possibility of Rewards and Perks

While not as extensive as credit cards, some banks offer cashback rewards or a loyalty system where customers can earn points that can be redeemed for discounts and other offers. This means you can still enjoy some benefits from everyday spending with a debit card.

No Credit Score Required

Unlike credit cards, a debit card doesn’t require a good credit score or any credit score at all. This makes it an excellent option for young adults opening their first account or individuals worried about bad credit history.

Compatible with Digital Wallets

Debit card information can be saved to digital wallets, such as Apple Pay or Google Pay, providing an extra layer of security to your transactions. These digital wallets do not store your personal information, making using your card for online transactions safer.

Auto-Pay Bills

Debit cards can set up automatic payments for essential services like rent and utilities to avoid late fees and surprises. With auto-pay bills, you don’t have to worry about missing a payment and incurring late costs.

Online Shopping Made Easy

Storing debit card information on trusted retail websites makes online shopping even more convenient. This means you can quickly complete a transaction without pulling out your debit card or typing in the information every time.

Conclusion

Now that you know what a debit card is and its benefits, keep in mind that checking accounts come with various advantages that can help enhance your financial management and budgeting skills. However, since every bank has its own set of incentives, regulations, and requirements, choosing a checking account best suits your needs is crucial.