What is a debit card? How does a debit card work? Is an ATM card a debit card?
Find out the answers to these and other debit card related questions here.
What is a Debit Card?
Debit card definition:
A debit card is a bank card that allows you to perform transactions where the money is taken directly from your current account. Debit cards can be used at either an ATM (cashpoint) or at an online or physical outlet.
One of the chief reasons debit cards are so popular is that, if used effectively, they afford consumers the opportunity to stay on top of their finances rather than accrue debt through tapping into a credit line. Apart from allowances for minimal negative balances called overdrafts, debit cards work in real time to ensure that you only spend money that you have.
What is a Debit Card Used For?
The purpose of a debit card is to:
- Pay for goods and services in person
- Make payments online and telephonically
- Withdraw cash from an ATM
To make a debit card purchase or ATM withdrawal, you will need to have access to the card, as well as the relevant PIN and security information.
What is the Difference Between Debit Cards and Credit Cards?
Quite simply, your debit card is linked directly to your current account, while your credit card is not. As soon as you purchase something on your debit card, the money is deducted from your account.
On the other hand, when you buy something on your credit card, you only pay for your transaction when you are billed for it at a later date.
It’s important to note that credit cards do have a pre-arranged limit that is specific to each user, and you will be liable to pay your bills on time if you do not want to incur penalties.
Understanding Your Debit Card Info
Firstly, it’s vital that you keep your card information safe and secure. If your debit card information gets into the wrong hands, you could become a victim of fraud.
To better understand your debit card and how to use it, here are the answers to some of the most frequently asked questions:
- What is the card number on a debit card?
If you already have a debit card in your possession, you have probably noticed a card number that runs along the front of the card. Depending on who you bank with, this number is typically 16 digits but can be as long as 19 digits. You will need this number when using your electronic debit card to make purchases online or by phone. Remember that this number is connected to your bank account. Do all you can to protect it.
- What is the security code on a debit card?
On the reverse side of your card, you will find another important number that you will need to make payments and keep your account safe. Also referred to as your CVV, CVC or CID, this number is your security code and is typically 3 digits long. In most cases, it is located next to your signature, below your card’s magnetic strip. This number exists for your added protection to ensure that when you make a remote purchase, you are the veritable holder of your bank card.
- What is the sort code on a debit card?
Your sort code is the number that identifies your bank for the purpose of transferring funds from one institution to another. Some banks print the sort code on their debit cards. If you cannot find it on your card, you will find it on your bank statements or your online banking portal.
To learn more about how best to manage your personal finances, head over here:
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