by Shaheen Darr

Created on: November 14, 2008   Last Updated: October 29, 2010

A debit card differs from a credit card because the moment it is used to pay for a transaction, the money is debited from your bank account. It does not give you a 21 day credit period to pay and therefore no interest is charged for its usage. A debit card is as good as cash and can also be used as a cheque guarantee card when paying by cheque.

You can use a debit card for purchases at most places which offer the facility as long as you know your personal identification number (PIN). Once this is accepted by the electronic device, the transaction will be authorised. The main thing to remember is not to reveal your PIN to anyone else and to be cautious when you enter the PIN in a public place for security reasons. Payments for purchases or household bills can also be made on the telephone or via the Internet using a debit card but as with all Internet payments it is advisable to ensure that the site is reputable and secure.

A number of shopping outlets also offer cash back facilities when payment is made by debit card. This means that in addition to paying for your shopping you can also ask for some cash back if you have enough funds available in your bank account. This reduces the need to go to your bank each time any cash is required. Cash can also be obtained from the ATM machines available throughout the country using your debit card and the right PIN number. There are some ATM machines that might charge for the services that they offer but the majority of them are free.

Debit cards can be used overseas in most countries though it is wise to check the availability of these from your bank before you leave the country. This reduces the need to carry cash with you and there is less chance of your cash being stolen or lost. In the unfortunate case of losing your debit card you can call your bank and put a stop on any unauthorised usage of your card immediately. The only inconvenience is that it takes a fortnight or so for the new card and the PIN number to be sent out to you.

You have to be 18 years of age to qualify for a debit card but nowadays there is also the availability of a prepaid debit card where you can buy money to top up your debit card to insure against a situation of running out of money. This is targeted mostly towards younger children.

Debit cards have the overall advantage of steering a person away from unnecessary credit as it can only be used if there is sufficient money in your bank account. It is important to keep a check of your bank balance on a daily basis before you decide to use your debit card anywhere.

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