A debit card is a bank card used to access money that is available in a checking account, from an ATM machine or by making purchases. There are different types of debit cards with different policies and you should choose the card that best suit your budget and purchasing habits. You can get a revolving line of credit with debit card payment policies and credit card privileges. These cards are attached to the equity in your home or the money in your retirement account and they enable you to spend money that is not in your checking account.

Using this type of card can quickly deplete a large portion of your financial security and they are not meant for someone who has limited control over their spending.http://www.cunalendingcouncil.org/news/126.html http://www.mdbankruptcylaw.com/lawguide/creditanddebit/creditcardtypes.asp

Debit cards have taken over as the preferred way to shop and pay bills, credit cards are no longer the number one choice for consumers. 70 percent of card holders owned a debit card and they use them 53 percent of the time, to make purchases, every month. The ease of use of a debit card, in addition to, no interest rates and the assurance that the purchase is paid in full, has led more people toward this payment type. http://www.cunalendingcouncil.org/news/126.html

In 2008, Americans used their debit cards more often than they used cash, credit cards or checks and in one year, the use of debit cards increased by more than 22 percent.http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/will-debit-cards-outstrip-credit.aspx When a purchase is made with a debit card, the money used to pay for the articles is instantly taken from the card holders checking account. This can help to prevent over-spending and a lot of impulse shopping, unless the card is covered with expensive over-draft protection. This protection is available to card holders who are in good standing with the card issuer. Over-draft protection can amount to $500.00 or more, depending on your credit score with the issuer, this means the you can make a purchase for up to $500.00 over the amount of money in your checking account. Every purchase made that is over the actual amount in the checking account is hit with a fee that can amount to more than $35.00, or more per over-draft, depending on the card issuers terms and conditions.http://www.pirg.org/consumer/banks/debit/debitcards1.htm

If you use your card at an ATM machine to get cash, you may be charged a fee that is in addition to any fees charged by your bank and there is a limit to the amount you can withdraw in a 24 hour period. You should be aware that every ATM withdrawal is subject to extra fees and these are greatest when you use your debit card and your signature is 'not required. There is an additional cost to use your VISA and MasterCard debit cards and this fee can be from 0.417% to 0.325% of the purchase price. http://www.ucop.edu/finmgt/banking/ccpayguide.pdf

There are prepaid debit cards that allow you to put your money directly on the card through direct deposit. Some prepaid cards have no overdraft fees and your money from your paycheck will show on some prepaid cards up to three days earlier than your actual payday. http://articles.moneycentral.msn.com/Banking/BetterBanking/DebitCardsAGoodDealGetsBetter.aspx

The content on this page is not a substitute for professional financial advice. Please consult a financial expert before taking any action suggested on this page.