Business, Legal & Accounting Glossary
A card issued by a bank that combines the functions of an ATM card and checks. A debit card can be used to withdraw cash at a bank like an ATM card, and it can also be used at stores to pay for goods and services in place of a check. Unlike a credit card, a debit card automatically withdraws money from your checking account at the time of the transaction. Debit cards are regulated by the Electronic Funds Transfer Act.
A debit card is a plastic card that resembles a credit card. Using a debit card a customer can withdraw funds on deposit in the customer’s account using an ATM (automated teller machine.) A debit card draws directly on funds in the consumer’s bank account (i.e. checking account). Most businesses that accept credit cards will also accept a debit card. A debit card transaction pays the seller of goods or services by withdrawing funds already on deposit in the buyer’s bank account, as opposed to a credit card transaction where funds are loaned to the buyer by the card issuer. A debit card usually requires the owner to supply a PIN number or a signature. As a result, a debit card can be considered a relatively safe alternative to cash.
Debit cards are a convenient way of paying by plastic without having to borrow or pay interest and charges.
They are linked to a bank account, and rather than allowing you to run up a debt that you later clear, the funds are taken almost immediately from your account as and when you use the card.
Debit cards were introduced to the UK in 1987 with Barclay’s Visa Delta Connect card, followed a year later by Switch.
Switch has recently been taken over by Mastercard’s Maestro system, and so the major UK debit cards are now run, like credit cards, by Mastercard and Visa. This means they can be used internationally at more or less anywhere that accepts credit cards.
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This glossary post was last updated: 22nd April, 2020 | 5 Views.