How Does a Debit Card Work?

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A debit card is presented to vendors for payment of goods or services, and the funds are usually taken in real time out of a bank account. Use a debit card as a secure way of traveling and making purchases with help from a registered financial consultant in this free video on credit and personal finance.

Part of the Video Series: Credit & Personal Finance
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Video Transcript

This is financial adviser, Patrick Munro talking about how a debit card works. Debit cards have recently come into sharp focus in the last ten years and are used quite widely, not quite as wide as credit cards but nevertheless the same convenience. What happens is when a consumer identifies some goods or services, they pull out a card that looks identical to a credit card. It has a Visa logo, American Express or Master card logo and it is presented to the vendor for payment of those goods and services and swiped as a traditional credit card would be, however, at the time the dollars are taken not from a bank in the form of a credit charge but rather taken in real time out or your bank account, your cash account which means that you have really paid in cash but not used cash but rather used a debit card so it is a convenient way and a secure way of traveling around and paying for your purchases without having to incur the risk of carrying actual cash. This is Patrick Munro talking about how a debit card works.

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