Share on facebook

What is a Debit Card

What is a Debit Card - For consumers, the difference between a "debit card" and a "credit card" is that the debit card deducts the balance from a deposit account, like a checking account, where the credit card allows the consumer to spend money on credit to the issuing bank. In other words, a debit card uses the money you have and a credit card uses the money you don't have.

"Debit cards" which are linked directly to a checking account are sometimes dual-purpose, so that they can be used as a credit card, and can be charged by merchants using the traditional credit networks. A merchant will ask for "credit or debit?" if the card is a combined credit+debit card.

If the payee chooses "credit", the credit balance will be debited the amount of the purchase; if the payee chooses "debit", the bank account balance will be debited the amount of the purchase.

The "debit" networks usually require that a personal identification number be supplied. The "credit" networks typically require that purchases be made in person and often allow cards to be charged with only a signature, and/or picture ID.