What Is a Debit Card and How Does It Work?

Going to purchase an item, you may need a debit card if you do not enjoy carrying cash around.

Of course, no one enjoys that due to the several risks involved. Therefore, a debit card is one of the necessities that make life easier.

Here, we will help you understand what a debit card is and how best to enjoy it.

What is a debit?

Debit cards are gotten from the bank or credit union when you open a checking account. They are used to pay for things or collect cash from an automated teller machine.

On some occasions, you may use the debit for free, while in some cases, you may have to pay a fee before you may use it. 

Officially, a debit card is a payment card that deducts or debits the money directly from your checking account when it is used. It can also be called ‘check cards’ or ‘bank cards’.

Debit Card versus Credit Card

There is no difference between debit and credit cards in their physical appearance. However, they do not perform the same duties or simply, do not work the same way.

While credit cards use money that you borrowed, debit cards use the money on your checking account. You can also use both of them to perform the same kind of transactions.

When carrying out a debit transaction, money is deducted from an account immediately or within a few hours.

On the other hand, in a credit transaction, the money goes toward building up a balance that requires settling in the future.

If you want to carry out a credit transaction, you might permit the purchase using your signature.

After that, the merchant communicates with the card processor and deducts the money from your bank account.

Unfortunately, this process can take two to three days before the last action. It takes a little longer for the funds to actually leave your account.

Some debit cards offer some incentives, comparable to credit card incentive programs. It could be such a promo as 3% cashback on all purchases.

What is the Major Reason for Using a Debit Card?

With a debit card, you can purchase your item without having to carry your cash around. In most stores, using your debit card is an acceptable way of paying for the items you bought.

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All you need is to swipe the card and enter your PIN on a keypad. Once you do so, you will enter the amount that will be debited from your account and that will be done.

Overall, you can use your debit card at an ATM to withdraw some money from your checking account. You can also use it to make online payments. 

Can I keep track of my debit card?

Yes, you can keep track of your debit card.

With your bank or credit union, you can get your statement of your account every month. The statement details every activity you carried out on your checking account.

This includes everything you did with your debit card. Your statement contains the following information:

  • The place you used your debit card and how much you spent, including what you paid for (if you entered the information)
  • The person you wrote a check to and for how much.

Note, with your statement, you can always help track your spending and create a budget.

How Can I Make Safe my Debit Card?

To keep your debit card from theft or another person tampering with it, you have to:

  • Keep your debit card number and PIN private and from others.
  • Try to minimize using your debit card to buy things online. Also, if you must do so, make sure that the portal is safe and secure.
  • If your debit card gets lost, ensure you report it to your bank or credit union as soon as you can. Ask your bank to cancel the card and send you another card. Though this may incur another fee, it is better than risking the whole money in the card when it gets stolen.
  • Ask your bank to send you account alerts by email or text message. This can let you know if your account has less money in it than you think or if another person withdrew money from your checking account using your card or pin.

Debit Card Fees

Normally, debit cards do not cost any extra fees. Mostly, there are no annual membership fees or cash-advance charges on them.

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However, you may not always escape from fees completely. For instance, if you withdraw cash from an ATM that’s not from the bank that issued your debit card, you could be charged a transaction fee.

In the sense, if you use a debit card in a bank other than the one that issued it to you, you are likely to incur a fee, especially if you use it for more than a specified number of withdrawals.

Advantages and Disadvantages of a Debit Card

In case you want to know what is in for you if you apply for a debit card, the following will guide your decision:

1. With debit cards, you can make your purchases in cash with money you actually have in your checking account. This is in contrast to having to borrow money on credit. 

2. Every transaction you made with a debit or check card will appear on your monthly statement, making it helpful for you to see where the money had gone.

3. Even though lost or stolen money is gone forever, if your debit card is lost or stolen, you can always report it to the bank.

As a result, the bank can deactivate the card, remove any fraudulent transactions from your account, and issue you a new card.

4. If you have poor credit, it will be easier for you to get a debit card so far as you have an account with the bank. 

5. With a debit card, your issuer will not charge you any annual fees. 


Debit cards have many setbacks that you might want to know:

1. Debit cards rarely offer so many benefits. In fact, it does not offer so much protection against fraud as a credit card does.

If anyone gets into your actual bank account and withdraws funds using your debit card, you will lose the money instantly. Unfortunately, getting it refunded can be tough, that is if you will get it at all.

2. Another disadvantage is that you cannot spend more than the amount of money you have in the bank.

 3. Lastly, if you don’t have any money in your account, your card could be declined, or you may incur overdraft fees. This could be very stressful during emergencies.

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Frequently Asked Questions

#1. What is a PIN?

A PIN is a security code that you can use to access your debit card. ‘PIN’ is an acronym for personal identification numbers. A bank or credit union gives you a PIN when you get a debit card.

Besides, you can change your PIN to a number you will remember. The PIN is usually a four-digit number and you can always change it, especially if someone else has access to it.

Therefore, make sure that no other person has access to the PIN. If not, the person can access your debit card and withdraw your money without your consent.

#2 How do I use the PIN?

When you use your debit card, you will have to input your PIN on a keypad. That will give you access to your money on the debit card.

Never share your PIN with anyone. Memorize it and avoid keeping it in your wallet or on your card.

#3 What if I use all the money in my checking account?

If that is the case, you may not have enough money in your checking account. As a result, your debit card will be ‘declined’ when you swipe it to pay for your purchases or use it at the ATM. And so, you will not be able to buy things.

However, that is not to say you may not make purchases with your debit card in certain situations. This is because some banks and credit unions could let you sign up for ‘overdraft protection.’

That means you can use your debit card even when you do not have enough money to pay for your purchases. As the case may be, this may come with an additional payment. For it to work, you may have to pay a fee to the bank.

Bottom line

A debit card helps to ease off the stress that comes with money. With the card, you can always carry out financial transactions, even without having any contact with your bank.



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