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What Is a Debit Card and How Does It Work?

Written by Julie Ryan Evans | Edited by Ali Cybulski | Published on 4/18/2024


A debit card looks and acts like a credit card, with one big difference: You’re not borrowing money when you use a debit card. Instead, every transaction made with a debit card, also known as a bank card or check card, deducts funds directly from your checking account.

You can also use a debit card to withdraw cash from an ATM, but the money still comes from your checking account. Here’s more about using a debit card, including how it works, how to choose one and how to protect yours.

On this page:

What is a debit card?

A debit card can be a handy way to make purchases with money you have in a bank account. It is typically linked to a checking account but may also be connected to a money market account or a savings account.

A debit card acts like a check, except you insert, swipe or tap the card to pay or to get cash directly from your checking account.

A debit card is different from a prepaid card, which allows you to load money onto the card and spend up to that amount. A prepaid card is also called a prepaid debit card, and many come with a Visa or Mastercard logo. It is not linked to a bank or credit union account.

Generally, you can’t spend more than you have in your checking account with a debit card or your transaction will be declined. Some banks may allow you to make overdrafts. You’ll have to replace the funds, and you could owe overdraft fees.

How does a debit card work?

When you open a checking account at a bank or credit union, you typically receive a debit card. Your debit card is linked to your checking account and allows you to spend money from that account without writing a check.

A debit card allows you to make purchases without carrying cash. You can also use your debit card for quick access to cash at an ATM or at checkout with a purchase.

Your debit card comes with a PIN you can set and then use to authorize a transaction or to access your account at the ATM.

The balance in your account determines your debit card’s spending limit unless you have overdraft protection. Your transaction may be declined without overdraft coverage. Some financial institutions may also set daily purchase or withdrawal limits for security purposes.

How do you get a debit card?

You can get a debit card in several ways, depending on the type of card you want:

  • Open a checking account. You may automatically get a debit card when you open a checking account. If not, you can request one by going to your bank’s website, calling its customer service line or visiting a local branch. You may need to provide a minimum initial deposit to open an account.
  • Buy a prepaid debit card. Prepaid debit cards can be purchased online and at various retailers, such as grocery stores and pharmacies. Make sure you register the card to receive protections against theft and loss as well as errors.
  • Consider a second-chance checking account. If you can’t get approved for a traditional checking account, you may want to explore a second-chance checking account that comes with a debit card. This type of account can help you rebuild a positive banking history as long as fees and service restrictions are minimal.

What are debit card fees?

One of the big benefits of debit cards is that you can’t rack up debt because you’re usually limited to spending only what you have in your account. But you’ll need to be aware of some fees that could lead to debt if you’re not careful.

Make sure you understand any fees that may be associated with your account and their effect on your balance. Common fees may include:

  • Out-of-network ATM fees. Your bank may charge you for using ATMs outside of its network, including ATMs overseas. Fees vary by financial institution, but they can add up quickly.
  • Overdraft fees. You may be charged overdraft fees when you don’t have enough money in your account to cover your transactions. Fees vary by bank, according to the Federal Deposit Insurance Corp. (FDIC), and some can be about $35 per transaction. However, the Consumer Financial Protection Bureau (CFPB) has proposed a rule that would limit what banks can charge.
  • Foreign transaction fees. Banks may charge these fees for using your debit card outside of the U.S. or for spending in a foreign currency. Fees can vary but typically range from 1% to 3% of each transaction.
  • Replacement card fees. Some banks will replace your card for free, and others may charge a few dollars.

What is the difference between a credit card and a debit card?

All plastic isn’t the same. Credit cards and debit cards both offer convenient ways to make purchases and access cash, but with distinct differences. The big one: debt.

With a credit card, you are borrowing money from the credit card company, which determines your card’s credit limit. You’ll typically receive a monthly bill, and paying less than the full amount can mean accruing interest charges. Always pay your card on time and in full whenever possible to build a strong credit history.

A debit card involves no borrowing. You are spending money you already have in your account. Only an overdrawn account can result in paying fees and having to cover your transactions.

Other differences include:

Rewards programs

Many credit cards offer programs that let you accumulate miles, points or cash back rewards with every purchase. Debit cards don’t usually provide such programs.

Safety protections

Under federal law, if your credit card is used fraudulently, you’re responsible for no more than $50. However, with a debit card, that amount changes based on how quickly you report the theft or loss. You could be responsible for $50 or the entire amount.

Cash withdrawals from ATMs

You can generally use credit cards and debit cards to get a cash advance from an ATM. But fees are generally much higher when you use a credit card.

Debit card pros and cons

Is a debit card right for you? Here are some pros and cons to help you determine the answer:

Should you choose debit or something else?
Pros Cons
A debit card can be convenient. You can’t buy now and pay later.
A debit card typically doesn’t carry annual fees. You could pay overdraft fees if you overspend.
A debit card doesn’t charge interest. You don’t build credit history.
A debit card allows you to withdraw cash from your checking account, often without fees. You usually can’t access rewards programs.
A debit card doesn’t require a credit check. You will have limited fraud protection compared with credit cards.

What should you do if your debit card is stolen?

Unfortunately, thieves are always looking for easy access to cash, and debit cards are hot commodities. If yours is lost or stolen, act quickly to minimize the damage:

  1. Report the loss or theft to your bank or credit union immediately.
  2. Follow up in writing. The Federal Trade Commission (FTC) recommends including your account number, the date you noticed your card went missing, and when you reported the loss. Keep a copy of your letter.
  3. Monitor your accounts and report unauthorized charges immediately.
  4. Request a new card.

Frequently asked questions

How old do you have to be to get a debit card?

The minimum age to get a debit card with a checking account is 18, but teens and kids can get one if a parent or guardian establishes a joint account with them.

What is a CVV on a debit card?

The card verification value (CVV) number is a three- or four-digit code intended to prevent fraud. It may appear on the back or the front of the card, depending on the issuer.

What is a virtual debit card number?

A virtual debit card number is a randomly generated, temporary number linked to your debit account. You use it instead of your real card information for extra security when making purchases online.

What’s the difference between a debit card and an ATM card?

An ATM card can only be used to withdraw money from ATMs. A debit card lets you access cash at ATMs, make purchases and get cash back from some retailers at checkout.

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