Debit cards are payment cards that deduct money from the consumers’ accounts directly when purchases are made. They are widely called “ bank cards” or “check cards, which are normally used to buy products or services; You can also draw money from ATMs or businessmen but they will add another amount of money when you consume.
How a Debit Card Works
A debit card is a rectangular-shaped piece of plastic card, similar to any charging card. How much money you can use with a debit card has something to do with the amount of money you save in your bank account.
In certain sense, debit cards have the functions of both ATM cards and credit cards. You can draw money from ATM with a debit card, just like the former one; In other cases, you can also use them to do consumption, just like the latter one. Lots of financial agencies are trying to replace the normal and single-use ATM cards with debit cards issued by two large issuing agents of credit cards such as VISA or Master card, This kind of debit card comes out with your check account automatically.
No matter whether it is used for cash withdrawals or product purchases, the functions of debit cards are the same: holders can withdraw money for the first time from the associated account. Thus, your expenditure is limited to the amount which can be used in the checking account, and the exact amount that you can withdraw next time is fluctuated with the remaining amounts in your account day by day.
There is also a limit constraining the biggest amount of money you can use every day, which means your expenditure can not exceed certain money within 24 hours.
Holders can set a PIN for the debit card or not, depending on their habits. If there is a sign of a major dealing agency on it, it normally can work without the sign, the same with credit cards.
Debit cards fees
In general, debit cards don’t generate additional fees: no membership fees or cash advances.
However, they don’t guarantee that there are no fees at all: if you choose another bank’s ATM to withdraw money instead of the issuing bank, you are likely to be charged ATM fees.
What if the money you spend with the debit card exceeds the remaining amount in your account? You may receive a fee for borrowing money because there is not enough money staying in your bank account.
The pros and cons of debit cards
Consumers are having consumption with cash if they show debit cards in stores. That is, they are using money they have earned instead of money borrowed from the bank. However, they are much safer than cash. Every transaction conducted with debit cards or check cards will be listed on the monthly statement. In this way, consumers easily track where they have spent the money.
Bear in mind that there are not so many perks provided to debit card holders as those provided to credit card holders, moreover, there are not so many fraud protections. First, if a thief breaks into your actual bank account by using your name and withdraws money successfully, it’s almost impossible for you to find this amount of money back which means you lose a mount of money immediately. Getting a refund could be difficult.
The lost and stolen cash disappears forever from your account, but you can report to the bank the details of your lost and stolen debit cards. The issuing bank can cancel the cards’ effectiveness, delete any fraudulent transactions from the holder’s account
