Similar to a credit card, a debit card is also plastic money. You can swipe the card on the POS machine at any retail store and also use it for making online transactions. The debit card is linked to a savings account; thus, the money you spend from it is the money you already have. It also implies that the debit card does not contribute to increasing the debt burden. Although, you can avail overdraft facility on your savings account, subject to certain conditions.
You can use the debit card on stores which accept card payment by swiping the card. You can also use it for making any online transaction. However, you should be careful with regards to where you are sharing your card’s information as if your card’s information gets stolen, then online thieves can drain your account very quickly.
The debit card can also be used to withdraw cash from ATMs. However, you can also avoid carrying cash and use the card itself to make the transaction by swiping on the POS machine. Since it uses the money you already have, the debit card does not help in improving bad credit.
In addition, you can also use the debit card to teach kids how to use the credit card. Both these cards have limits; the only difference is that the limit of credit card is much more flexible than that of debit card. The banks have also attached a ‘reward’ system with a debit card. So, if you know where you will be spending your money in future, then you can pick the card that will be most beneficial.
Know more about the details of Debit Card: What is Debit card and how to use it?
