Money Matters - Debit Card

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by Agonzalez0903
Last updated 4 years ago

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Social Studies
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Economics

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Money Matters - Debit Card

Debit Cards

A payment card that deducts money directly from a consumer’s checking account to pay for a purchase. Debit cards eliminate the need to carry cash or physical checks to make purchases. In addition, debit cards, also called check cards, offer the convenience of credit cards and many of the same consumer protections when issued by major payment processors like Visa or MasterCard. Unlike credit cards, they do not allow the user to go into debt, except perhaps for small negative balances that might be incurred if the account holder has signed up for overdraft coverage. However, debit cards usually have daily purchase limits, meaning it may not be possible to make an especially large purchase with a debit card.

The first debit card may have hit the market as early as 1966, according to a report by the Kansas City Federal Reserve . The Bank of Delaware piloted the card. And by the '70s, several other banks were trying out similar ideas. Robert Manning, author of Credit Card Nation, said debit card usage picked up in the '80s and '90s as more and more ATMs started cropping up across the country. In 1990, debit cards were used in about 300 million transactions. In 2009, prepaid and debit cards were used in 37.6 billion transactions.

What is a Debit Card? - http://www.nerdwallet.com/blog/nerdscholar/debit-card/Debit Card FAQ - http://usa.visa.com/personal/personal-cards/debit-cards/faq.jspWhy you should get a Debit Card - https://www.1stsource.com/personal/debit-cardFees - http://banking.about.com/od/checkingaccounts/a/debitvscredit.htmHow to get a Debit Card - http://www.wikihow.com/Get-a-Debit-Card

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There is no free borrowing period, in contrast to credit cards Should never be used to shop online due to a high risk of theft Some banks charge transaction fees for using debit No option to withhold payment in the event of a dispute with a merchant, in contrast to credit cards

Cons

There is nothing mysterious about debit cards. With their Visa and MasterCard logos, they may look like they're masquerading as credit cards, but they do not draw money from the same source as credit cards. Debit cards, sometimes called checking cards, draw funds from your checking account, not a line of credit.Many debit cards are actually dual debit/credit cards. You can use them as one or the other. When you make a purchase with such a dual card, the card reader will ask whether you want to use your card as a debit or credit card. If you use it as a debit card, you enter your personal identification number (PIN) to authorize the transaction. You may also have the option to get cash back when you make a debit purchase. This is like accessing an ATM at the same time as your purchase -- you simply consolidate your transactions.

A debit card is a plastic card with a magnetic strip that can be used by a consumer as a means of payment. Unlike a credit card, there is no line of credit, the debit card is linked to your checking account. Funds charged to a debit card are directly deducted from the bank account it is associated with.

Debit cards: Fast. Convenient. Secure.• Pay for everyday purchases without carrying cash or checks• Use where cash or checks aren't accepted—like online• Pay monthly bills more efficiently

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