What are the different types of cards ?

There are three types of cards: Debit cards, Credit cards and prepaid cards.

Debit card:

Issued by the Bank where you have an account. It is linked to the bank account. User can use this card to withdraw cash up to the limit present in his/her bank account. It can also be used only for domestic fund trans-fer from one person to an-other.

Credit card:

Issued by banks / other enti-ties approved by RBI. Unlike debit cards, in case of credit cards, a customer can also withdraw beyond the amount of money present in his bank account. But there is a limit for each credit card up to which extra money can be withdrawn. Also there is a time limit and interest charges to be paid back.

Prepaid card:

These are pre-loaded from a customer’s bank account. It can be used for limited amount of transaction. These can be recharged like mobile recharge and are very safe to use. The main advantage of debit/credit or prepaid bank-ing cards is that they can be used to make other types of digital payments. Some of the most reputed and well-known card payment systems are Visa, Rupay and MasterCard, among others. Banking cards can be used for online purchases, in digi-tal payment apps, ATM ma-chines, PoS machines, online transactions, etc.Apply with your respective bank and provide Know Your Customer (KYC) details his respective bank branch. Deb-it cards can be exchanged with Rupay Card. Bank ac-count is mandatory to get the card. As per Government orders, all the Jhan Dhan ac-count holders will be issued Rupay Cards.

How to use Debit/Credit cards ?

  • To withdraw money from an ATM, user needs to insert his/her debit/cred-it card and type in your unique PIN Number (4 digits) which is provided by the bank. The maxi-mum amount that can be withdrawn per day is set by the bank.
  • With debit card, user can also use the ATM to carry out other financial and nonfinancial transac-tions such as finding out bank balance, depositing cheque or money, getting a mini statement, etc. without visiting the bank branch.
  • While shopping at major retail stores and shops, follow the process shown in figure:
  1. User gives the debit card to the cashier at the store
  2. Merchant runs the card through PoS machine
  3. Merchant types in the amount of the purchase
  4. Comsumer types in the PIN of the card
  5. Customer gets SMS on his registered mobile for transaction completed
  6. Merchant keeps the signed receipt and hands a copy to the user for records
  7. Machine prints out a receipt which has to be signed by the user
  8. Bank debits (de-ducts) the amount of purchase directly from user’s account

Online Transactions using Debti/credit cards

Individuals have started opting for social media and mobile apps for most of the banking transaction. There are three different ways like RTGS, NEFT and IMPS through which we can trans-fer funds from one bank ac-count to another.

NEFT is an electronic fund transfer system which oper-ates on a DNS (Deferred Net Settlement) basis which set-tles transactions in batches. You can use the NEFT ser-vice through the bank branch through cheques, DD or you can make the transfer using net banking facility in your bank account. There is no minimum limit on the amount that can be transferred.

RTGS : In RTGS the trans-actions are settled individu-ally and not in batches. The transaction is processed im-mediately after it is executed throughout the RTGS busi-ness hours. The RTGS window is open from 8 am to 4 pm be-tween Monday and Saturday except 2nd and 4th Saturday as well as bank holidays. The minimum limit on transfer of funds at a time is Rs 2 lakhs.

IMPS : It is an instant pay-ment service available for money transfer to bank ac-counts in India. It is ideal for transactions with small amount. The main feature of IMPS service is that it is avail-able 24/7 including Sunday and bank holidays through-out the year, which makes is particularly helpful during emergencies. IMPS is basi-cally used for transfers us-ing the mobile phone number through apps or mobile bank-ing. You can also use IMPS in your netbanking services for when you want to transfer us-ing account number details. The process is the same as NEFT. There is a limit of Rs 2 lakhs if you use the online transfer using bank account in netbanking.

Threats to Debit/Credit cards

Credit/Debit card fraud

Credit card fraud is committed by making use of credit/debit card of others for obtaining goods or services. The threat emerges due to steal-ing of information like Credit card number, PIN number, password etc. Theft of cards and cloning of cards are also employed to commit such frauds. Hackers use complex techniques like Phishing, Skimming etc. to gain credit card information from innocent users.


Phishing is a way of attempting to acquire information such as user-names, passwords, and credit card details by masquerading as a trust-worthy entity through e-mail. Phishing is typically carried out by e-mail spoofing and it often directs users to enter details at a fake website whose look and feel are almost identical to the legitimate one.


Skimming is the theft of credit card / Debit card information. Thief can procure victim’s credit card number using basic methods such as pho-tocopying receipts or more advanced methods such as using a small electronic device (skimmer) to swipe and store hundreds of victim’s credit card numbers. Common scenarios for skimming are restaurants or bars where the skimmer has possession of the victim’s credit card and makes note of card details for further use.


It is one of the method of social engineering over the telephone system, most often using features facilitated by Voice over IP (VoIP), to gain access to private personal and financial information from the public for the purpose of financial reward. The term is a combination of “voice” and “phishing”

Social Engineering

Social engineering involves gaining trust hence the fraudster poses as a member of staff or even security guard. The fraudster would then ask the customer to check the card for damages. The fraudster would have gained confidence from his prey using various tactics such as offering assistance to the customer who perhaps would have tried to use the ATM without success or perhaps the customer who is not familiar with use of ATM machine and requires assistance.

Best practices for users to remain safe

  • Do not share your card in-formation over the phone or internet with ANYONE, irrespective of whether you know them or not.
  • Do not give any card or personal information while answering a telephone call where the caller claims to represent the card issuing bank or any related organ-ization. You can always call back the bank on publicly displayed numbers, if re-quired.
  • While making payment at a merchant location or ser-vice provider like restau-rants, etc, insist on punch-ing in your PIN rather than hand over your card for pro-cessing the payment.
  • Always check the bill.
  • Always retain the transac-tion receipt for comparing against the card statement that you receive at the end of the month. Most people throw this away and do not match against the amount charged in the statement.
  • Do not throw away the transaction receipt when you are done with it. Tear it or shred it. Dumpster divers are known to sift through garbage bags meticulously and retrieve all your card re-lated information that can then be used to conduct unauthorized purchases, especially over the internet.
  • While using an ATM, en-sure that no one is watch-ing your finger movement as you type your PIN. Watch out for cameras within the premises that can easily capture your PIN number. Try and cover your hand while you type in the PIN.
  • Always memorize your card and PIN numbers, and in case of any loss or theft, report immediately to the concerned bank so that they can temporarily freeze your account and prevent any further unauthorized transaction until you re-ceive your card replace-ment.
  • Never save your card pass-word in a regular folder in your computer hard drive or email account. If the ac-count gets hacked, there is every possibility that an un-authorized transaction will take place.
  • While making a payment over the internet, check for the security logo on the website confirming it as a safe site. If in doubt, check with the concerned compa-ny before making any such payment.
  • Avoid keeping your credit or debit card in the wallet. In case your wallet gets sto-len, you will at least have access to money at that moment.
  • Download banking apps di-rectly from the bank web-site and avoid using links that you receive via email or SMS to download your banking app.
  • As card users, have to do your part towards secur-ing your hard earned mon-ey, while the banks need to work harder towards secur-ing information and money
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