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Using your debit card is always preferable to a credit card, especially if you don’t know how to use the latter efficiently and are prone to rolling over unpaid debt. In which case, you pay interest rates of 30-plus per cent annually.
Banks also now encourage you to use debit cards at merchant outlets by enhancing their reward programmes. However, one needs to now be more careful when swiping a debit card at the point of sale (PoS) terminal. For the past two months, if swiping a debit card, you also need to put in your PIN number, as additional security. If you are even a little careless on this, it can be misused; redressal is a long process. And, unlike credit cards, where you can refuse to pay the disputed transaction, with a debit card the money is already in the bank. A fraudster can withdraw it; if lost online, it is next to impossible to recover.
The number of card-related complaints to the institution of the banking ombudsman accounted for a fourth of the total complaints in 2012-13, the second largest category.
According to Jairam Sridharan, head of consumer lending and payments at Axis Bank, asking for the PIN at PoS terminals increases the card’s vulnerability but there are steps one can take to protect it.
The obvious precautions are not writing down the PIN or revealing it to another person. If there is an emergency, go to hospitals, airports or railway stations where you can safely use your ATM card even late at night.
In addition, handing over the card and giving out the PIN number in a restaurant or hotel is not a great idea. The person handling your card can copy details like the CVC number, name and expiry date. Using this information and the PIN number, he will be able to use your card for online transactions. Banks are to start deploying cordless terminals that are GPS-compliant and will be brought to you for swiping. Till that happens, it makes sense to walk over and type out your PIN number yourself.
Subrat Pani, co-founder and Director, OneAssist, which provides card protection services, says one can also change the PIN number every few months and keep different numbers for different cards. "The earlier notion of having the same PIN for the sake of convenience is not safe,'' he says.
In addition, register your mobile number with the bank for SMS alerts to track transactions. Get comprehensive covers which will cover all your credit, debit, online and offline transactions, for a charge of Rs 1,200-1,500 a year. In many cards, it is an added feature that the bank and card company offer.
