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You must have seen people making payments at stores and malls by their credit cards, but have you ever seen them using debit cards? If you wonder what debit cards are and how they differ from credit cards, then do not worry as we will tell you all about debit cards.
Debit
Card vs. Credit Card
Debit cards are the younger cousins of credit cards, if you want to relate the
two. Both cards are similar in appearance and usage, but the way of paying differs.
If you make payments using you debit card, it is like using tearing a check.
Suppose, you go to a retail store and buy a pair of jeans, and now you have
to make a payment by debit card. You can simply hand over debit card to the
clerk who will electronically deduct the specified amount of money from your
bank account. But with a credit card, you are to pay the bills at the end of
the month that specifies the amount spent on buying the pair of jeans.
PIN
code
If you want to make online transactions by your debit card then you will have
to use your Personal Identification Number code (PIN) at an ATM. The money is
directly transferred from your account to you at ATMs.
Transaction
fee of debit cards
If you make transactions at retail stores by your debit cards, your transaction
fee will be around $1.50 per month. Online transactions, like at the ATM, will
cost you around 50 cents. Transaction fee is levied on you by the bank that
issues you the debit card. There are also some banks that pay you for using
debit cards.
Pros
and cons of using debit cards
Debit cards help you to keep your money in check. No bills are imposed on you
at the end of the month unlike a credit card. However, you have to be careful
while using a debit card. Sometimes, you may tend to pay more by debit card
because of the transaction fee. It may not be a wise idea to pay by debit card
at a gas station, as you could end up paying more.
Protection
against frauds
Besides, always keep your PIN confidential and do not give it to anyone. Remember,
a thief can make transactions jut by knowing your PIN, even if he does not have
your card.
