Question:

Need some help understanding debit card?

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O.K, I have a personal debit card now. I'm in high school, and when I got the card the bank account person explained about cheqing and savings account and how to transfer, etc. But I want to know another thing. I've never used the swipe-thingy. If I put money into my chequing account, then swipe it at a swipe-thingy, enter my PIN, would the price of the purchase be deducted from the money in the chequing account? Or is the swipe thing for credit cards only?

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  1. Debit card = checking card pretty much.

    You swipe it, enter amount or it is automatically done, choose checking/savings options (if available), enter pin, and the money is instantly deducted from the amount your checking account has. It's pretty much the same as cash.


  2. Yes, you swipe your card and the money is deducted from whichever account your card is tied to and that is usually the checking account.  Most cards give the option for you to choose to use it as a debit card (this is when you would input your PIN), or as a credit card.  Ask your bank if this is possible for your account.  I use mine like a credit card because when I go on-line to check my balance, I can see exactly where I spent the money.  If I use it as a debit card, all I can on-line is that X dollars were spent but it doesn't tell me at which store.

  3. If you swipe your debit card, the amount is automatically deducted from your checking account just like you wrote a check or made a withdrawal.  

    Be sure to keep track of your spending though, because some banks will actually allow you to overdraft your account.  Overdraft is when you only have $100 but "swipe" your card for $150 charge.  (for example) You want to avoid this because most banks will charge a fee for each occurrence.  It really stinks to get charged a $33 overdraft fee for a $5 meal at McDonald's!

    Check out the site below.  Lots of great info on money management.  Also, since you are young, you have the potential to really build some wealth if you pay attention and make good choices!  

    Good luck!


  4. ~~Yes your debit card can carry a Visa or Mastercard logo, but it always is deducted from your account just as if you had written a check. Don't trust the balance you see online or hear on the phone either, as sometimes it can take a day or two before the deduction shows up out of your account. Always keep a running balance yourself, and when you use it-deduct from your available funds. This way you never overdraw your account which incurs very expensive extra charges. Also, some places can have a transaction fee for using your card, you would also need to deduct that from your balance too.~~

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