Customer paying at a cafe with credit card

Debit cards are one of the most common forms of payment. In fact, according to Bankrate, 63 percent of people between the ages of 18 and 29 don’t bother with cash, checks, or a credit card, preferring to use their debit cards.

When you use a debit card, the amount of the payment is debited, or subtracted from, the checking account to which the card is linked. You spend $5, and $5 comes out of your account, sometimes instantly and sometimes a few days later, depending on how the purchase is processed.

There are generally no limits on the number of transactions you can make with a debit card in a single day. However, most debit cards have daily withdrawal limits, though they vary depending on the bank or card issuer.

Debit Card Benefits

For ease of use, debit cards can’t be beat. You don’t have to worry about keeping cash in your wallet, and there’s always a record of how much you spent, and where, on your bank statement.

Stores love taking debit cards, too. They’re accepted almost everywhere, in large part because most cards are part of either the Visa or MasterCard payment systems. In fact, many stores and other sellers prefer debit to credit cards because they pay lower fees on debit cards.


Debit cards usually have low – or no – direct fees. However, you’ll need to watch out for overdraft fees, possible out-of-network ATM fees, any applicable PIN transaction fees, and any monthly fees to maintain the checking account that the card is associated with.

Didn't Make That Purchase

If someone makes an unauthorized charge on your debit card, you will need to work quickly to resolve the problem. The Electronic Fund Transfer Act provides protections for you: if you report your card stolen or lost within two days, your maximum financial liability is either $50 or the total of the unauthorized transactions, whichever is less. If you wait longer than two days, you may be liable for $500 or more, so it’s important to act quickly.

Overdraft Protection

Many banks like First Citizens’ Credit Union offer overdraft protection on the debit cards they issue. Having it means that if you try to spend more than is in your account, they may cover that amount for you.

Debit Cards vs. Credit Cards

While credit and debit cards appear to be very similar, and you use them in a lot of the same ways, what happens after you use the card is completely different. With debit cards, the amount of a purchase is deducted directly from your bank account balance. But when you use a credit card, the amounts you spend are recorded, appear on your monthly statement, and must be paid back in full by the due date to avoid interest charges.

There are some other differences that go beyond how the cards work:

Cash Withdrawals. In addition to purchases, debit cards are designed for cash withdrawals. If you use a machine within your bank network, you usually won’t pay any fees. But with a credit card, as soon as you withdraw the money, you’ll pay an upfront fee for the advance. And you’ll begin to accumulate a finance charge at a rate higher than your card’s APR (which is the rate you pay on purchases).

Consumer Protections. Another difference between debit and credit cards is that if you buy defective merchandise with a debit card, you can’t withhold payment while your complaint is resolved. You’ve already paid. In contrast, your credit card provider will let you withhold payment while it investigates your claims in cases where you feel you shouldn’t have to pay. With a debit card, you have to investigate yourself, and there’s no assurance you’ll succeed in getting a refund.

Credit History. There is one area in which credit cards offer a real benefit that you don’t get with debit cards. Using a debit card to pay for purchases doesn’t help you build a strong credit history, since you’re not using credit. Of course, a strong credit history is not a guarantee when you are using a credit card. You still need to pay your bill on time, and pay it in full if you can.

First Citizens’ Federal Credit Union is committed to continually assisting its customers in reaching their financial goals with the very best in personal service, innovative financial products and state-of-the-art technology, all of which will help you save.

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