Data released by RBI for the year 2009-10 says that the usage of debit cards is on a larger scale than credit cards in India. The debit card transactions recorded last fiscal amounted to Rs 26,418 crore, a 42% jump from Rs 18,547 crore in 2008-09. However, credit card transactions dipped by 4% to Rs 62,852 crore from Rs 65,356 crore.

The same period also recorded increase in the circulation of debit cards by 33% as against a 10% decline in credit card circulation over the previous years.

"Shopping through debit card has become more convenient now due to rise in point of sale terminals in various shopping centres," says Subrat Pani, business head- cards, Kotak Mahindra Bank. "Volume of transaction has increased due to easy availability of debit cards, which are given with every newly opened bank account."

"During the slowdown, banks became cautious in issuing new credit cards to check defaults. Also, last year many lost their jobs which led to the decline in spending through credit cards," said Pani.

The total number of debit cards in the country amounted to 17 crore in 2009-10 as compared to 12.8 crore in 2008-09.

"While debit card can enable the consumer to track their spending better, it is also a great payment tool for those who are credit averse or are not credit worthy," says a senior official at VISA.