What is debit card?


Debit cards, like credit cards, are electronic payment cards or, in other words, bank cards. With debit cards we can perform non-cash transactions, paying for products or services. It is possible to pay, using POS (point of sale) terminals and the Internet, as well as ATMs, if it is necessary to withdraw cash or to transfer is to the bank account.

Debit cards, unlike credit cards, do not have credit limit and any other limits, because they are meant only for personal means, not credits. When we are paying with debit cards, we are spending only our personal means which are available in our bank account, therefore, if we do not have them, it is impossible to perform a payment – it is denied with indication that means in person’s bank account are insufficient. Only limits that debit cards have refers to cash withdrawal and transfers of money, namely, each debit card has certain limit of money which can be withdrawn or transferred from the bank account.

As statistics show, debit cards and credit cards are produced in approximately equal amounts, but debit cards are more widespread and more popular, because they have lower maintenance fee. Credit cards have about ten times higher maintenance fee than debit cards, because their services are more expensive or, in other words, they are costly for banks. Debit cards have obtained such popularity because of their availability – before they are handed out there is no need for checking of credit history and creditworthiness, because debit cards, as it is known, do not have any credit commitments between bank.

Paying with debit cards, payment is reserved in person’s bank account or is sent directly to the bank – it depends on type of payment and payee. Also payment receiving time depends on these factors. When person pays with debit card, card is a kind of intermediary which can slow down payments, therefore, sometimes it is faster to pay with a cash, because there is no intermediaries.

A large part of debit cards does not work abroad, because a lot of countries introduces their own, individual system of debit cards. For the same reason debit cards are rarely applied with function of discount card. However, in order to solve this problem there are introduced united systems not only for credit cards, but also for debit cards which operates worldwide, therefore, people can perform payments anywhere in the world without problems.

As every thing, also debit cards have advantages and disadvantages, but, anyway, it seems that any electronic payment card has more advantages than cash payments. That is why nowadays people increasingly use electronic payment cards instead of cash.