Debit Card Basics
What you need to know about using your debit card

MONEY IN THE BANK
If credit cards mean “pay later,” debit cards mean “pay now.” These cards are tied to your bank account and are like paying with cash. With debit cards, you’ve got to have the money in the bank to cover your purchases. These cards look similar to credit cards so make sure you know what type of card your financial institution issued you.

Using Debit Cards
In recent years debit cards have risen in popularity, often replacing payment by cash and check. A debit card is unlike a credit card in that it is tied directly to a checking account. When you make a purchase with a credit card, you are taking out a loan of money from the card issuer, whereas a debit card purchase withdraws money directly from your bank account.

There are of course benefits to each method. Credit card users who pay off their bill each month benefit from a free loan of money. On the other hand, consumers concerned with debt load can limit their spending by using debit cards.

Because your debit card is tied to your bank account, there are specific considerations and precautions to keep in mind when you use them.

Stay in Check
Always know your current bank account balance and available funds. And don’t forget about checks that haven’t cleared your account.

Consider opening an online banking account that allows you to manage debit card purchases, checks and bill paying all at once. You’ll have a one-stop shop for managing all the ins and outs on your account.

When Using a Debit Card
Don't Forget to

• Keep sales receipts or copies.
• Record your transactions in your check register as soon as possible or check transactions online.
• Remember to account for any bank fees that may apply.
• Review statements carefully. If you suspect a mistake, call your financial institution immediately.

Download Free eBook: Debit Card Basics

PDF format, 833KB.

PRACTICAL MONEY GUIDES
For more information, visit www.practicalmoneyskills.com
Visa Inc.

When you understand how to manage your finances, you’ve got an invaluable tool in taking control of your life. Wise use of these skills can provide peace of mind, financial freedom, increased buying power and a secure future. This guide is one of a series on PRACTICAL MONEY SKILLS FOR LIFE.

Comments (0)

Name

Email

Comment

smaller | bigger

Add Comment