Debit Card Rates

By: EconomyWatch   Date: 6 October 2010

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The core Content Team our economy, industry, investing and personal finance reference articles.

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Debit card rates are the primary factors determining the revenue generation of a debit card issuer. The debit card rates might be very confusing for the majority.

 

There are many debit cardholders who tend to exploit the several benefits of a debit card without really knowing the loopholes. This ultimately leads to dissatisfaction and consumers find themselves in dire straits owing to the not-so- transparent debit card rates.

Such is the scenario for most of the debit cardholders. Debit card rates may vary greatly. Some debit card rates may vary anywhere between 7% to 29.99%. Debit card rates in developing countries may also skyrocket as high as 150%. Countries like Brazil may have debit card rates higher than most developing countries.

Debit card issuers like Visa or MasterCard can offer an account to a debit card holder for debit card rates as high as 240%. Such accounts are equipped with low credit limit and meant for quick paybacks.

Logistics of debit card rates

In order to get desired debit card rates of return a debit card issuer adds the desired debit card rates of return to the loss rate to determine the debit card rates of interest.

 

Assuming that the debit card holder will behave in a manner the other debit cardholders do, the debit card issuing bank adopts a strategy for the client , by gathering information from the application and history of the applicant and decides the debit card rates.

The bank also keeps in mind to attract new account holders by offering the new debit card holder, debit card rates which will be at par with the competitors and also place the bank at a profitable position.

The debit card issuing bank can at any point of time with a notice of 30 to 60 days increase the debit card rates within legal limits. If a debit card holder refuses the change the account is paid off.

 

Types of debit card rates

  • Cash debit card rates:
    These debit card rates are usually a bit higher and charged by the bank for cash or cash like transactions.
     
  • Default debit card rates:
    These debit card rates come into effect from the time one of the following conditions are true:
    1. One or two late payments
    2. Amount due after the due date.
    3. Any returned payment.
     
  • Variable debit card rates:

    These debit card rates are decided depending on publications in an authentic respectable journal. An economic indicator indicates the market conditions.

 

 


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