How does a Debit Card Work

A debit card is a card that allows you to make a transaction, in which the money is instantly deducted from your checking account. If you don’t have the funds, the card will not process the transaction. Using a debit card requires that you have the funds in your bank account. Instead of carrying cash, you are relying on the card. If you do not have money in the checking account, you will be denied use of the card by the merchant. You cannot buy anything with a debit card, if there are not enough funds to make the purchase. While the debit and credit card may look the same, they are vastly different transactions.

The credit card allows you to make the transaction without having  funds on hand. You can pay this off over time. You pay interest for this benefit, on the borrowed money.

A debit card does not charge interest, because you are not borrowing money. You already have the money in your account.  It is merely a way of making a transaction without carrying cash.

A debit card looks like a credit card, as it may even be issued by the same bank, and display the same logo on the card. For example, Mastercard and Visa, both offer debit and credit cards, but only one of them requires money to be available, and this is the debit card.

A debit card is swiped through a terminal, the same as a credit card, but with a debit card, you will be asked to provide a pin number. This is a number provided by you, at the time of origination of the debit card, and prevents another from making a transaction on your account without this pin number.

A debit card will keep you out of debt, as you cannot borrow money. Again the money must be available.

If you are seeking to get out of debt, use a debit card to process transactions. If you don’t have the money, you can’t make the purchase. A debit card is simply an easier way to make a transaction without using cash, or a credit card.

A debit card can be used for online transactions, or purchases made in person. Just remember, if you don’t have the cash, you aren’t going to buy it using a debit card. Debit cards simplify the process of making a purchase without carrying cash.