What Are Debit Cards Used For?


Quick Answer

Debit cards are issued by banks and credit unions and are used as a form of payment, says Consumer.gov. They are usually given to a bank customer when he opens a checking account.

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Full Answer

Debit cards can be used in lieu of cash and allow someone to use money in his checking account without having to write a check, notes Consumer.gov. Debit cards can also be used at ATMs to withdraw cash, but using certain ATMs might come with fees.

While a debit card can be used for online purchases, they don't come with the same safety measures as credit cards, says Consumer.gov. For instance, if someone were to have his debit card number and information stolen online, the thief could completely drain his entire checking account before he realized that his number had been stolen. An individual can only lose $50 if a thief steals his credit card information online as long as the theft is immediately reported.

Credit cards use funds that an individual borrows, while debit cards use funds that the individual already has in his bank account, notes Consumer.gov. Both debit cards and credit cards usually come with fees in certain circumstances, such as for overdraft protection.

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