Debit Cards

Debit Cards are also known as check cards. Debit cards look just like credit cards or ATM cards, but are used just like cash or a check. A debit card is the way to “pay now”. When you use a debit card the money is deducted directly from your checking or savings account. Debit cards are accepted at many locations: grocery stores, retail stores, gas stations, restaurants etc. They provide an alternative to carrying a checkbook or cash.

Debit Card vs. Credit Card

Debit means to subtract. When you use a debit card, you are subtracting money from your checking or savings account. You may only spend what is in your account.

Credit is money that is available to you from a bank or other financial institution. It is very much like a loan. You must repay this amount, plus interest.

About Debit Cards

  • It is often easier to obtain a debit card than a credit card.
  • When using a debit card, it is not necessary to show identification at the time of your transaction.
  • When you use a debit card, it may not be necessary to carry cash or a checkbook.
  • When traveling, a debit card may eliminate the need to obtain travelers checks or carry large amounts of cash.

    • What If My Debit Card Is Lost or Stolen?

    Just like a credit card, a debit card may be lost, stolen, or used without your knowledge.

    As a debit cardholder, you must know the extent of your protection.

    Government regulations require debit card issuers to set a maximum liability of $50 if the debit card is reported lost or stolen within two days of discovery.

    Liability increases to $500 if the lost or stolen debit card is reported within 60 days. If you do not notify the bank within 60 days of receiving your bank statement, you could lose everything in your checking and overdraft accounts.

    Ask your bank about the extent of your liability. Some banks offer better protection than the government requirements. Some debit cards offer “zero liability” in case of fraud or theft if the cardholder reports the missing card within 2 business days of discovery.

    Tips For Responsible Use of Debit Cards

  • If your card is lost or stolen, report it immediately to your financial institution.
  • If you suspect your card is being used fraudulently, report this to your financial institution immediately.
  • Hold onto your receipts from your debit card transactions. A thief may get your name and debit card number from a receipt and order goods by mail or phone.
  • If you have a PIN number, memorize it. Do not keep your PIN number with your card. Don’t choose a PIN number that a smart thief could figure out (i.e., your phone number, date of birth).
  • Never give your PIN number to anyone.
  • Always know how much money you have available in your account.
  • Keep all of your receipts in one place for easy retrieval.

    • On-Line Debit Cards:

    These are cards that work the same as an ATM card. They perform an immediate electronic transfer of money from your bank to the merchant’s bank account.

    To access this type of account, you must punch in your personal identification number.

    Off-Line Debit Cards:

    This type of debit card looks like a credit card. The merchant’s terminal reads the card, and creates a debit against your bank account. Unlike the on-line debit cards it does not debit your account immediately, it usually takes approximately 2-3 days.

    The choice of an On-Line or Off-Line debit card may not make any difference to you unless:

  • your financial institution charges a transaction or monthly fee
  • you prefer the security of a PIN-required transaction
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