Debit Cards Versus Credit Cards

Debit cards have come a really long way from their original incarnations; where in the past, they primarily served as a means to withdraw funds from a bank account, today they can be used at point of sales transactions at many stores and online retailers. The addition of a Visa, Mastercard or other credit card logo to the face of a debit card can expand its usefulness exponentially, allowing it to be used anywhere such cards are accepted. However, some people are confused about the difference between credit cards and debit cards, as the two have become somewhat intermingled and the line between them has become more and more blurry.

The Basics Of Debit Cards

Essentially, debit cards are linked to a checking or savings account and are used much like a check would be. Most debit cards are used in combination with a PIN (personal identification number) that increases their security features and helps prevent unauthorized use. Since debit cards are linked and provide access to a person’s personal bank accounts, they must be kept in a safe place and their PIN must be kept a closely guarded secret. In terms of appearance, debit cards closely resemble credit cards but do not always have a series of numbers or expiration dates printed on their faces.

Many people strictly use their debit cards for the purpose of withdrawing funds from a bank account. The term “debit card” is basically interchangeable with the term “ATM card” – which means “automated teller machine card.” When people refer to using an ATM card, they usually mean a debit card, and vise versa. These cards are accepted not only at the bank’s ATMs, but also at the ATMs of other, unassociated banks; when used at ATMs outside of their own network, though, debit cards can incur usage fees.

In addition to being used for withdrawing money from a bank account, debit cards are accepted at many grocery stores and other retailers upon checkout. Once all of the items have been scanned and a total has been given, a person can use their debit card – in combination with their chosen PIN – to pay for their purchase. This option has dramatically decreased the use of personal checks in such situations. Retailers generally prefer debit cards over personal checks as much less processing is involved from an accounting standpoint.

The Basics Of Credit Cards – And Credit Card/Debit Cards

Unlike debit cards, credit cards are not normally linked to a personal checking or savings account. Instead, they serve as a way to gain access to a line of credit extended by a credit card company. When a person uses a credit card to pay for their purchase, they are accruing debt that must be paid off at a later date; this debt also accrues interest charges and may be subject to other processing fees. By not being careful, a person can accumulate a great deal of debt very quickly by using credit cards; when the statement arrives in the mail, many people realize how reckless they have been.

Credit cards are often used in lieu of debit cards when debit cards are not accepted. Most online retailers do not provide a means of using debit cards and PINs, so people who find themselves shopping online often have to use a traditional credit card. However, one of the most popular exceptions to this problem are debit cards with credit card logos and numbers imprinted on them. These cards allow a person to use the funds from their personal checking or savings accounts to pay for purchase anywhere that credit cards are accepted.

Although a debit card may have a credit card logo, numbers and an expiration date on it, it does not cause additional debt to accrue. These products have further decreased the popularity of paper checks, and fewer and fewer people are using those items these days. Instead, the convenience of credit cards and debit cards rolled into one is rapidly becoming the preferred method of payment for millions of people.