A debit card takes the form of a credit card, but is electronically coded to your bank account. You can get a debit card for a checking or savings account and for most lines of credit. Online money exchangers like Paypal and Global Xchange are also using debit cards for easier access to your money. Some debit cards come with a Visa or Mastercard logo, but they do not offer credit--they take the money directly out of your account.
How You Use a Debit Card
You can use your debit card just like you would a credit card. The store or service provider must be willing to accept debit cards. If your card has a Visa logo, you can use it where Visa is accepted also. Just like the credit card must have an available balance to your credit limit, you must have an available amount of money in your account to use your debit card. Some banks offer an overdraft account or line of credit to attach to your bank account. If this is your case, you can use your debit card up to that limit, although that is not always wise.
Why Use a Debit Card
Using a debit card negates the necessity to carry cash. This is good for two reasons: 1. It is safer. If someone steals your debit card you can call the bank and have it canceled so no one else can use it. If you had cash and got robbed, most likely it's gone and you'll never get it back. 2. You don't have to worry about bringing the right amount of cash. If you are shopping and have $20.00 and find something you want for $24.00, you will still be able to buy it.
Another Great Reason For Using a Debit Card
If you are trying to get out of debt and don't want to use credit cards any more, the world will be a tough place to navigate. Try renting a car without a credit card, or reserving a vacation spot. If you have a debit card with a Visa logo, you can still use it like a credit card, only you won't be able to overspend, because you can only use it to the limit of money you have in the bank. Keep a separate account that you don't have a debit card for and keep all your monthly budgeted money in it. The account you have with the debit card will have the money you can spend on other things in it. This way you can stay on budget and get yourself out of debt in no time.
