Debit Cards

Debit cards are a growing, convenient and cash-free way to shop. When you pay with your debit card, the amount is debited, or subtracted, from your checking account and transferred electronically to the account of the person or business from whom you've purchased goods or services. Sometimes you authorize a debit card transaction with your personal identification number (PIN). Other times, you sign the receipt. Either way, the amount is deducted from your account immediately upon the acceptance of the transaction.

Debit card variety

There are different types of debit cards. Basic debit cards, sometimes called bankcards, let you withdraw cash from ATMs and make purchases using your PIN. Those cards usually have just your bank's name on them. Other cards, which usually have both a bank name and a credit company's logo, such as Visa® or MasterCard®, can be used in more places to handle a variety of transactions. With some cards, you may be able to make both credit and debit purchases.

A word of caution

Debit cards can make your life easier and they can help you avoid using too much credit. But it's possible to overdraw your account. That could cost you a fee. And if you have a line of credit, you can end up borrowing against it and getting yourself into debt. The way to avoid both problems is to keep track of your balance and not withdraw more than your balance. And, of course, you want to keep track of the card, too, and keep your PIN secret, so no one else can access your account.