how a debit card works
a debit card is a card linked to your checking account it looks like a credit card but it works differently the amount of money you can spend on a debit card is determined by the amount of funds in your account not by a credit limit such as credit cards carry your debit card may be connected electronically to your account or it can be an offline card offline cards take longer to process transactions unlike with a credit card you do not go into debt when you use a debit card because you are using it to access funds you already have you do not have to make monthly minimum payments on a debit card because there is no debt to repay 1you can use a debit card to get cash from an atm or you can make purchases with it like you make purchases with credit cards with debit cards you may need to enter your pin personal identification number although many debit cards can be used to make purchases without a pin debit cards draw the funds immediately from the affiliated account so your spending is limited to what s available in your checking account and the exact amount of money you have to spend will fluctuate along with your account balance debit cards usually have daily purchase limits meaning you can t spend more than a certain amount in one 24 hour period 2investopedia joules garciadebit card feesgenerally debit cards do not have annual membership fees or cash advance charges but there are other potential fees to consider 34a prepaid debit card which has a set amount of money stored on it may have similar fees a prepaid debit card is like a gift card in that it allows you to spend a sum that s been loaded onto the card fees for prepaid debit cards can include monthly maintenance fees transaction fees atm fees reloading fees balance inquiry fees inactivity fees paper statement fees and foreign transaction fees 6debit card vs credit cardmany bank debit cards are issued by credit card companies so it may seem like there is little distinction between credit and debit cards for example a mastercard debit card can look like a mastercard credit card however they differ in many ways from the way they finance a purchase to the amount of consumer protections they provide here is a comparison of some of their main features in more detail credit cards and debit cards work in fundamentally different ways in terms of how they use your money using a debit card to make a purchase is like writing a check or paying with cash you re paying for the item with funds in your bank account not with revolving credit 