We have all heard of acredit card, or plastic money as it is often called. But what are debit/chargecards and how are they useful?
The Debit Card
The difference between a credit card and a debit card is that in the case ofthe latter, the payment is made against the balance in your bank account. So adebit card relieves you of having to withdraw lump sums of money from your bankaccount or of carrying your cheque book around every time you go shopping ordecide to eat out.
The Charge Card
By possessing this card, you earn the luxury of delayed payment -- but onlyfor that monthly cycle. Unlike a credit card, you don’t get the revolving creditbenefit (whereby you pay just a percentage of the total money spent everymonth).
A debit/charge card as opposed to a credit card
If you have the capacity to clear your dues on time then you can opt for adebit or a charge card, especially if you have the tendency to get into big debttraps with your credit cards.
They’re a rage abroad, and are in use sparinglyin India. A smart card hasa microchip loaded on it (which contains a certain amount of money). The cardgets loaded with money from the cardholder’s bank account. It is mainly used topay for low-value items like chocolates, cigarettes and soft drinks. After youmake the purchase, the card is inserted in a `terminal,’ where the value of thepurchase gets deducted from the card balance. Visa Cash and Mondex (fromMasterCard) are two very popular smart cards globally. Once these companiesbring these cards to India, you no longer will have to keep digging into yourpockets for change to buy your favourite cola or chocolate.