Business & Finance

Posts Tagged ‘Debit Cards’

That card you use to draw money from the ATM is a debit card. Debit cards don’t have a credit card company logo on them instead all they have is the bank logo, card number and your name. Some debit cards these days look exactly like credit cards and even carry the same logos. Both types can be used at the tills when making a purchase. Your debit card is attached to your checking account. When making a purchase with your debit card the amount of your purchase is automatically deducted from your checking account providing you have the funds available in that account. If you have less than the purchase amount the card will be rejected.

With a credit card, when you make a purchase, you are in fact using someone else’s money. This someone is the issuer of the credit card i.e. the banking institution. With a credit card you are in fact borrowing the money from the bank, with the intention of paying it back. In addition you will pay interest on the loaned money at a rate you and the bank institution agree on from when you applied and accepted the credit card. The interest is also known as the annual percentage rate (APR). Although Credit and debit cards might look and act the same they provide different levels of consumer protection.

Debit card or credit card? Most experts say that you should use your debit card for the same type of purchases as you would for all your cash style purchases. Avoid using your debit card for online or expensive payments as it is easier to dispute a charge when you have made the payment with your credit card. It also makes it easier for the banks to solve as the charge can easily be removed until the problem is resolved.