Debit Card

Debit card summary:

• Debit cards are plastic or metal cards that cardholders can use to withdraw or deposit cash in and out of their checking account, or to pay for goods and services.

• Debit cards don’t charge interest because funds aren’t borrowed. You can only spend the money that’s in the account the card is linked to.

• Debit cards work with ATMs, gas stations, cashiers, mobile payment platforms like Apple Pay, Samsung Wallet and Google Wallet, and money transfer apps like Venmo and Cash App.

Debit card definition and meaning

Debit cards are payment cards that look just like credit cards, but are linked to your checking account. You can use a debit card to put money into your account or withdraw money from it. You can also use a debit card to make purchases in person or online. When you use one, you’re not borrowing money, and there will be no bill to pay. You can spend up to the amount that’s in your account. 

Key concept: A debit card is a plastic or metal card attached to a checking account that can be used to withdraw cash, deposit cash, or pay for goods and services.

More about debit cards

Debit cards look like credit cards and have some of the same features. They allow you to conveniently and safely make purchases online or in-person. You can also access cash using ATMs, cashiers, mobile payment apps, and money transfer apps. 

Lost or stolen debit cards can be replaced. However, depending on the institution, you might be held responsible for unauthorized charges:

• Before any fraudulent charges occur: $0

• If you report the loss within two business days: $50 limit

• If you report the loss within 60 calendar days: $500 limit

• After 60 days: Unlimited liability 

Let your bank know as soon as you know your card is missing. It’s a good idea to regularly monitor your account for unauthorized charges. If your bank offers alerts, set them up so that you’ll be notified quickly about unauthorized activity on your account. 

Debit cards: a comprehensive breakdown

Debit cards are attached to checking accounts and are usually provided free of charge to account holders. They typically feature major credit card brand logos and can be used anywhere credit cards are accepted.

The spending limit on a debit card is the balance in your account. Your transaction will likely be declined if it’s for more than the amount of money you have. At some banks, you could set up overdraft protection that allows you to spend more money than what’s available in your account, for a fee.

Debit card alternatives

Prepaid debit card

A prepaid debit card isn’t attached to a bank account, and you don’t need a bank account to use one. You purchase the card and fund it with cash or electronic money transfers. Like a traditional debit card, you can use a prepaid card to make purchases or withdraw cash. 

Prepaid debit cards don't help you build credit like secured credit cards. All prepaid card charge fees, but the kinds of fees and the amounts vary widely. For example, some charge a monthly maintenance fee, while others charge for each transaction. Check several options before choosing a card.

ATM card

People who have savings accounts but not checking accounts can also get an ATM card to make withdrawals more convenient. With an ATM card, you can withdraw or deposit cash. If your ATM card has a major credit card logo, you can use it like a regular debit card.

Debit cards vs. credit cards

The main difference between debit and credit cards is that credit cards involve borrowing and could help you build credit. However, credit cards also make it easy to spend money that you don't have. Debit cards make spending easier and safer than carrying cash. 

Debit cards can make sticking to a budget easier because you're spending your own money.