How a Debit Card Works

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How a Debit Card Works

 How a Debit Card Works


In a sense, debit cards work like a cross between ATM cards and credit cards. You can use them to withdraw money from the bank's ATM, as in the first case; or you can shop with them like last time. In fact, many financial institutions are replacing their simple universal ATM cards with debit cards issued by major payment processors such as Visa or Mastercard. These debit cards automatically come with your checking account.

In a sense, debit cards work like a cross between ATM cards and credit cards. You can use them to withdraw money from a bank's ATM, as in the first case; or you can shop with them like last time. In fact, many financial institutions are replacing their simple universal ATM cards with debit cards issued by major payment processors such as Visa or Mastercard. These debit cards automatically come with your checking account.

How a Debit Card Works


Whether used to withdraw money or to buy something, a debit card works the same way: it immediately withdraws funds from an affiliate account. So your spending is limited to what is available in your checking account and the exact amount you need to spend will fluctuate from day to day with your account balance.


Debit cards usually also have daily spending limits, meaning you can't spend more than a certain amount with them in a 24-hour period.


Debit card purchases can be made with or without a PIN. If the card bears the logo of a major payment system, it can often be used without it, just like with a credit card.


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