Millions of Americans use their debit card each and every day. From swiping at the grocery store to paying the electric bill, debit cards are convenient and safe ways to spend money. Gone are the days of carrying huge wads of cash and worrying about it getting lost – debit cards are slim, secure and can always be canceled if they get lost or stolen.
However, not every debit card is the same. In fact, there are several types of debit cards available that work differently than others. Most cards are linked with a bank account, but this is not always the case. Continue reading the slides below to learn more about all types of debit cards so you can choose the best one for your financial needs.
A debit card is the most convenient method of spending money. It is typically linked with a checking account, where you deposit money and keep the funds you plan to spend. Each time you use your debit card, money is withdrawn from the account to which it is linked.
Debit cards are different from credit cards, which allow you to charge expenses that you might not have the money for. Since a debit card is linked with your bank account, it will only work if you have money in the bank. A credit card is not linked to a bank account, and using it can help you build a credit history.
Using a debit card and credit card simultaneously is a great way to build your credit. Most large purchases require you to have a solid credit history, which means using your credit card, paying down your debts and making on-time payments.
Some banks even allow you to link your debit and credit cards together so that you can use your checking account to make your monthly credit card payments.
You can often get a free debit card by opening a checking account at a bank or other financial institution. Some banks even allow you to customize your card with a picture or artwork.
Using a debit card can help you become a more responsible spender. You can track your spending on your checking account to manage your money. Some banks and financial institutions even offer advanced features that help you learn about your spending habits.
For example, if your bank offers an app, you might be able to see graphs and charts that categorize your spending into groups such as “necessities,” “luxuries,” and others. This can help you determine the areas in which you can cut back and save money.
You can view your debit card statement each month for a more detailed account of your deposits and withdrawals. These are particularly helpful because you can easily keep track of how much money is in your checking account so that you do not get overdrawn.
When you spend more money than you have in your account, it is known as an overdraft. Many banks charge overdraft fees when this happens. Some even assess the fees for each individual transaction, which can quickly add up if you aren’t careful.
Setting up an online account that is linked with your debit card is the best way to maintain a good handle on your finances. If you want an even better grip on your money, consider setting up a direct deposit debit account.