Debit Card

[Carding]

What Is a Debit Card?
A debit card is a payment card that deducts money directly from a consumer’s checking account to pay for a purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases directly from your savings. In addition, debit cards, also called “check cards,” offer the convenience of credit cards and many of the same consumer protections when issued by major payment processors such as Visa or Mastercard.

Unlike credit cards, debit cards do not allow the user to go into debt, except perhaps for small negative balances that might be incurred if the account holder has signed up for overdraft protection. Debit cards usually have daily purchase limits, meaning it may not be possible to make an especially large purchase with a debit card.

KEY TAKEAWAYS

• Debit cards eliminate the need to carry cash or physical checks to make purchases, and they can also be used at ATMs to withdraw cash.
• Debit cards usually have daily purchase limits, meaning it may not be possible to make an especially large purchase with a debit card.
• Debit card purchases can usually be made with or without a personal identification number (PIN).
• Some debit cards offer reward programs, similar to credit card reward programs, such as 1% back on all purchases.

How a Debit Card Works
Debit cards serve a dual purpose: They allow the user to withdraw money from his or her checking account through either an ATM or the cash-back function many merchants offer at the point of sale. In addition, they also allow the user to make purchases.

ATM cards, by contrast, only allow the user to withdraw money from an ATM. And credit cards only allow purchases—not cash withdrawals—unless the credit card holder has a personal identification number (PIN)–enabled cash advance feature. However, the cash advance taken from a credit card will incur interest, unlike withdrawing cash from a checking account with a debit card.

Debit cards don't always allow you to escape fees completely: If you withdraw cash from an ATM that is not affiliated with the bank that issued your debit card, you may be charged a fee.

Debit card purchases can usually be made with or without a PIN. If the card has a major payment processor’s logo, it can be run as a credit card, and the cardholder won’t need to take the risk of exposing his or her PIN. The money will still come directly out of the cardholder’s checking account, and there won’t be any finance charges when the debit card is run as a credit card. Some debit cards offer reward programs, similar to credit card reward programs, such as 1% back on all purchases.

Important: Debit card purchases are easy to monitor, and there’s no way to lose track of spending, as—unlike with using a credit card—the money comes directly out of a checking account.

Every transaction made with a debit or check card will appear on the account holder’s monthly statement, making it easy to keep track of purchases. Consumers are effectively making their purchases in cash—that is, with money they actually have, as opposed to money borrowed on credit.

However, unlike with cash purchases, there’s no way to lose track of amounts spent on a debit card. And while lost or stolen cash is gone forever, a lost or stolen debit card can be reported to the bank, which can deactivate the card, remove any fraudulent transactions from the cardholder’s account, and issue a new card.

Note that debit cards generally don't have as many protections against fraud as credit cards. For one thing, if an identity thief gets into your actual bank account, you lose the money immediately. But they are considerably safer than cash and do have protections if you inform the issuer promptly if one is lost or stolen.

(c) https://www.investopedia.com/terms/d/debitcard.asp

 

[Mutt]

Debit card. What is it and what can she do?

Content:

• Debit card features and benefits
• How to use it correctly and not be in debt (technical overdraft on a debit card)
• A bit of history

A debit card, also known as a debit or payment card, is the most popular type of bank cards. These cards are issued by almost every bank. By themselves, cards are not issued - they are necessarily tied to the client's current account in the bank and are a convenient tool for accessing this account. Thus, a debit card acts as a universal means of payment, with which you can remotely (without the participation of the bank's cash desk) pay for the product (service) you like or withdraw cash from an ATM.

Debit card features and benefits
The main difference between a debit card and a credit card is the impossibility of spending more funds than was deposited or transferred to the card (or rather, to its account). In other words, you can only use your own money without the possibility of obtaining credit funds. In reality, a so-called overdraft can be connected to a debit card - the ability to spend more money than is on the card account (within certain limits and in accordance with the tariffs set by the bank, which are quite unprofitable, I must say).

The main advantage of a debit card for a consumer of banking services is the rejection of cash and instant access to your money (which is safely in your bank account). Many people use such cards as salary (settlement) cards and receive their salaries not in a stuffy queue at the cash register, but at the nearest ATM, although recently there has been a tendency to use the card for payment in retail outlets.

With the advent of Debet, it became possible to pay by card online on the Internet.
The only caveat is that with all the possibilities of bank cards, the question arises about the financial literacy of their owners, and she, as a rule, is lame.

How to use it correctly and not be in debt (technical overdraft on a debit card)
Although a debit card does not imply the ability to use borrowed funds, sometimes situations arise as a result of which the balance on the card can go into negative territory and a technical overdraft arises (when you already take the bank's funds, and not your own, without knowing it yourself). The most common mistakes of holders who overspend on their debit cards, when a sudden debt on a card can turn into a decent amount of debt to the bank (read the card agreement!) Are the following:

1. Usually a debit card (with the exception of mostly salary cards) has a commission for use. It can be charged once a year, or it can be charged in parts every month (detailed conditions are spelled out in the standard agreement that the client signs with the bank when issuing the card). If there is no money on the account, the commission is written off anyway, but the balance goes into the negative range.

2. Debt arising on the card after conversion operations from one currency (for example, dollars) to another (euros). The authorization of the exchange operation occurs instantly (almost in real time), but the writing off of the commission for the conversion can take place in a day, or even two. The rate at the time of debiting may already be completely different, so if there is not enough money on the card, the balance (the balance on the card) becomes negative.

3. Withdrawing cash from an ATM of another bank, where there is a commission for withdrawing funds from cards of other issuing banks. People very often do not pay attention to such commissions (or there may simply be emergencies). Withdrawal of cash occurs, and the commission is charged the next day, but since there may no longer be money on the card, the balance sinks into minus.

A bit of history
Debit cards appeared first (as opposed to the same Europe or America) and were mainly used as salary cards. The very history of the appearance of cards is very curious. And relatively recently, only at the beginning of this century, the popularity of credit cards, which have long been used in European countries, began to increase. Until recently, the proportion of payment cards issued was as follows: 1% - credit cards and 99% - debit cards. This feature of the issue is not at all accidental for our country: in the 90s, most banks were opened specifically for financial fraud, among which the first place was the cashing of illegal cash flows.

But the reason for distrust of the population among banks was practically absent, since then there was a rule to collect a cash collateral from the client, acting as security. In this way, banks insured themselves against possible fraud and technical overdrafts.

The popularity of credit, which has emerged in recent decades, has reduced the number of debit cards issued in favor of credit cards.