Introduction to Debit Cards
Debit cards are issued by the respective banks in order to make electronic transactions easier. A debit card can be swiped with a PIN, or flashed at Wi-Fi enabled card readers in payment. A debit card collects money from the savings account that is maintained with the bank, ‘debiting’ the amount and reducing the savings. They can also be used to collect cash from ATMs.
Understanding Debit Cards
- Debit cards these days are normally issued the moment your account is activated. They’re made of plastic with essential information etched into the card like expiry date, name and card number, while on the back it contains other verification details upon prompting.
- Debit cards work as a midway solution between credit cards and ATM cards, where you can use a debit card to withdraw money on a limit from the affiliated ATM, or use it to fulfil payments on purchases. There is a limit on how much can be spent in a day using a debit card. Most credit cards require a PIN, though many others don’t and they can simply be flashed under a card reader to make the payment.
- As a rule, you cannot spend more than the balance your savings account has in the card affiliated bank. A few accounts allow zero balance option in your account, though spending more than whatever balance remains may be subject to charges. Swiping for cash at a non-affiliated ATM may also incur a small charge just as losing, replacing, regenerating a new card for whatever valid purpose may incur.
Highlights of Debit Cards
- Debit cards don’t put you in debt. The word ‘debit’ in the personal banking context refers to ‘withdraw’ or ‘subtract’ from your account. Credit cards mean that you’re borrowing from a bank, and credit cards require you to pay an interest on the amount borrowed.
- Debit cards are safer than credit cards in the sense that they are less riskier than making purchases on credit.
- Conversely, debit cards don’t provide as many offers and deals as credit cards provide.