Be Careful About Your Cards

Debit and credit cards are of great advantage in today’s age of plastic money. But they are also exposed to risks. Dr. Sampath Iyer outlines the precautions you must take while using a card.

- Dr. Sampath Iyer

Payment cards or plastic cards are a part of the payment systems. They are issued by financial institutions and enable an owner to access funds in his account or against a set credit limit and make payments by electronic fund transfer or access automated teller machines. There are four main types of cards. Debit cards are payment cards that provide electronic access to a customer’s bank account. These cards are linked to the bank account. credit cards are plastic cards which are issued by banks and other entities approved by the Reserve Bank of India to pay a merchant for goods and services against a set limit and payable on a monthly basis.

Prepaid cards are issued by banks or non-banking financial institutions against the value paid in advance by the cardholder and stored in such cards. The maximum limit that can be stored in any prepaid card at any point of time is Rs 50,000. Forex cards are issued by foreign exchange dealers and banks against value paid but in different currencies. They cannot be used in India and are for exclusive use overseas. All credit and debit cards have numbers printed on them – generally 16 digits.

This signifies a unique account number for a card and reveals some information about the card issuer and his associated account. The first six digits are the issuer identification number (IIN). These denote the institution that issued the card. For example, Visa cards begin with the numeral four, while Master card starts with numbers between 51 and 55. The rest of the numbers are individual account identifiers. The last number is the check digit which verifies the correctness of the number because these numbers are often typed, inputted or transferred by humans and susceptible to errors.