Debit cards are used to make purchases. When you open a checking account with your bank or credit union, you will be given a debit card. A debit card is sometimes free to use. You may be charged a fee to use the card.
Debit cards resemble credit cards. They do not, however, function in the same way. Credit cards make use of borrowed funds. Debit cards make use of funds already in your checking account.
Why would I want to use a debit card?
Debit cards allow you to make purchases without carrying cash. Most stores accept debit cards to pay for purchases. Simply swipe the card and enter your PIN number into the keypad.
Debit cards immediately withdraw funds from your checking account.
Debit cards enable you to obtain cash quickly. You can withdraw funds from your checking account by using your debit card at an automated teller machine, or ATM. You can also get cash back when you use your debit card to make a purchase at a store.
What exactly is a PIN?
A “PIN” is a personal identification number. PIN is an abbreviation for personal identification number. When you get a debit card from a bank or credit union, you’ll be given a PIN. You can change your PIN to a memorable number.
When using a debit card, you must enter your PIN on a keypad. This is one way the bank tries to prevent dishonest people from obtaining your money by using your debit card.
Never give out your PIN to anyone. Keep it in mind. Keep it out of your wallet or on your credit card.
How do debit cards function?
A debit card is usually provided when you open a checking account at a bank or credit union.
A debit card allows you to spend funds from your checking account without having to write a check.
You can use your debit card to make purchases in a store.
You can use it to withdraw cash from an ATM.
When you pay with a debit card, the money is immediately deducted from your checking account. There is no outstanding debt.
How do I find out where my debit card was used?
Every month, your bank or credit union sends you a “statement.” Your statement demonstrates:
where you used your debit card and how much you spent where you used an ATM, how much you withdrew, and what fees you paid who you wrote a check to and how much you wrote
Your statement can assist you in tracking your spending and developing a budget.
What distinguishes a debit card from a credit card?
When you use a credit card to make a purchase, you are borrowing money from the credit card company. Every month, the credit card company will send you a bill for the money you borrowed to buy things.
When you use a debit card, you are spending money from your checking account.
For instance, consider debit cards:
When you open a checking account, the bank will issue you a debit card.
When you use a debit card, money is taken from your checking account.
When you pay with a debit card, you do not pay interest.
You can withdraw funds from your checking account using a debit card at an ATM.
A debit card does not help you build a credit history.
Using credit cards:
You apply for a credit card at a bank or retail location.
Every credit card purchase is billed to you once a month.
If you do not pay your credit card bill in full each month, you may incur additional interest charges.
You can use a credit card to make online purchases that are more secure.
If you pay your credit card bill in full each month when it is due, you can build a credit history.
Can I use my debit card to make online purchases?
Your debit card will be accepted online. However, debit cards are not a good way to pay when shopping online.
When making online purchases, credit cards are preferable:
You may have a problem with something you purchased online. Using a credit card makes it easier to get your money back.
Someone could steal your credit card information online. The law states that you can only lose $50 if you report it immediately.
Someone could steal your debit card information online. The thief has the ability to withdraw all of your money from your bank account.
What if I spend everything in my checking account?
You could be short on funds in your checking account. That means your debit card has been “rejected.” You will be unable to purchase anything.
Some banks and credit unions may allow you to enrol in “overdraft protection.” That means you can use your debit card even if you don’t have enough money to cover the purchase. However, the bank may charge you a fee. Some banks may charge this fee for each purchase until you have enough money in your account to cover the cost of the items you are purchasing.
