Plastic money, debit and credit cards are taking place of cash in your wallets. There are two main reasons for this firstly as cash earns interest in the bank so it would be right to keep it there as long as possible. Secondly, cards are safe to carry than cash, in case you lose a card you will be limited to pay the replacing cost of the card. But are the cards really safe?
When you lose cash the loss is limited to the amount you were having in the wallet. But when you lose your plastic card and do not report about the loss immediately then there could be a great loss. When you report the loss immediately, the transaction would be blocked and the loss will be zero. Always remember to keep your card’s 24-hour helpline number with you. Ravi Shankar, head of direct banking at YES BANK, says cards have a loss protection policy cover. “Under this, if the card is lost and misused, the liability shifts from the customer to the bank, usually after the customer informs the bank.”
If your loss of card goes ignored and, hence, unreported, and goes into wrong hands then there are chances of misuse of your card. In that case you could end up taking a much bigger hit than if you used cash. For instance, your credit card can be used to buy merchandise up to your credit limit, or whatever part of it is available. Your debit card can be used similarly till cash in your account runs out, inclusive of overdraft. In case you have not reported loss of your card, it is up to you to prove that your card details were being misused. Yogesh Sangle, head, marketing (cards), Barclays Bank, “Any misuse or loss before the customer informs the bank is taken on a case-to-case basis.” Barclays Bank launched its credit card in India recently. This kind of loss is not a possible in case of cash.
At times people write their ATM Pin number on the card so that it is easy to use. But if you lose your card then, it is unlikely that anyone will be able to withdraw cash using them.
Now see the other possibility, your credit card does not get stolen or misplaced, you are doing transaction on the internet with your card. The card has a number and a CVV number. The latter is usually embossed on the card, so you cannot even scrape it off. If someone notes the two numbers down, it will be possible to use your card, although not at a merchant location or ATM. The advantage in this case is that it may be possible to track down purchases since, in most cases; deliveries of goods will have to be made at some physical destination.
So, it is apparent that if used smartly, it is possible to limit the loss on plastic money, but not in the case of cash if it gets pick pocket. Then from both the cards which one is the best to choose in terms of safety?
Amuleek Bijral, country manager, RSA, a security solutions provider says, “The biggest disadvantage with the debit card is that it hits your own account directly.” So, till the money is restored back into your account, you may have a cash flow problem.
On the contrary to it, if any mala fide transaction on a credit card is done, it is possible to withhold payment. Another way of containing loss on a credit card, says Rohit Tripathy, director and founder-promoter of ControlCase, India’s first payment card industry (PCI) auditing certification company, “is through chargeback”. This is done globally, where banks reverse the entire transaction in case of theft. And it is the possessing bank—the one on whose terminal the card is swiped—that usually bears the liability. Check about the chargeback policy with the bank before taking the card. So, there is a chance opting for a credit over debit cards.
By the end of this year, all merchant establishments will have to conform to the standards for processing credit cards itemized by the Payment Card Industry Security Standards Council (PCI-SSC), a global body.
Try to be safe and smart enough while using your plastic cards to prevent misuse of card.