Comparison of Direct Debit Cards vs. Deferred Debit Cards
Comparing direct debit cards with deferred debit cards requires you to take a closer look at a few specific elements of each card. Learn about how to compare direct debit cards and deferred debit cards with help from a professional financial adviser in this free video clip.
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This is Teresa Dentino, CEO and founder of The Financial 411 in Woodside, California. We’re going to talk about direct debit cards versus deferred debit cards. So, let’s first talk about what a direct debit card is. Direct debit cards are often used in place of cash or a credit card when making a purchase. The card is linked to your checking account, and the dollars for the transaction is removed from your account immediately – usually same day. In banking terms, that is called a debit, and therefore the name “debit card.” The deferred debit card is similar to a direct debit card in that it is linked to your checking account, or oftentimes a money market account at a brokerage firm. The term “deferred” refers to the fact that unlike the direct debit, the purchases that you make will be debited from your account all at the same time, and usually at some point toward the end of the month. This deferral of the debits from your checking account is what constitutes having a deferred debit card. Again, usually this type of card is associated with an account that you’ll have at a brokerage firm. This is Teresa Dentino, CEO and founder, The Financial 411, in Woodside, California.