debit card

Debit Card

An electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services. This removes the need for bank clients to go to the bank to remove cash from their account as they can now just go to an ATM or pay electronically at merchant locations. This type of card, as a form of payment, also removes the need for checks as the debit card immediately transfers money from the client's account to the business account.

Investopedia Commentary

The major benefits to this type of card are convenience and security. Along with the convenience of accessing account funds at anytime it also removes the hassles associated with having to write checks as payment like showing ID and associated fees. Debit cards are also considered to be a safer form of payment as a code is required to access the account funds, while checks can be easily stolen.

Related Links

Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

See also: Checking Account, Credit Card, Debit, Identity Theft, Savings Account

debit card

A plastic card that may be used for purchasing goods and services or for obtaining cash advances for which payment is made from existing funds in a bank account. Because a debit card provides about the same float as a checking account (one to three days), it is a less desirable method of payment than a credit card. These cards are often part of the comprehensive all-in-one accounts offered by many brokers.

debit card

small card, similar to a credit card, offering means of paying for a purchase through transfer of funds from the purchaser's bank account to the vendor. Financial institutions that process these transactions benefit from cheaper transaction costs (it is more expensive for banks to process transactions paid with checks) and immediate payment. Although the financial institution receives the credit immediately, the vendor is credited in the same way as in a credit card transaction-usually within a matter of days. Debit cards differ from stored-value cards (also known as smart cards), which simply subtract the transaction amount from cash value stored on the card

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