If your card has one of these logos,
it can be used as a debit card. PT Money
When you open a checking account, you’ll often get a free card that gives you access to
your money. All cards can be used at ATMs for withdrawing cash, balance
inquiries, and more. However, some cards — known as debit or check cards — can
also be used for purchases (both in person and online).
If you received a card and you’re
wondering what you can do with it, figure out if it’s really just an ATM
card or if it’s a debit card.
Look for the logo: to find out if your card can be used for purchases,
look for a payment logo on the card. For most cards, a Visa or MasterCard logo
appears at the bottom-right corner of the card. Discover and American Express
cards might show a logo somewhere else on the card. If there is no logo, you
have an ATM card that’s only good for use at an automated teller machine (ATM).
How
to Use Your Card
If your card has a payment network
logo, it's technically a debit card, and you can use it as if
it was a credit card.
At a retailer, swipe the card (or insert the chip, if it’s a chip-enabled card) at the payment terminal. You
can choose "Credit" or "Debit" —
the money will come out of your checking account no matter what you choose.
When shopping online, punch in the 16 digit card number where the merchant asks for a credit card number.
You’ll also need to provide your billing zip code and the security code on the
back of your card.
For paying bills online, you can do the same as above (as if shopping online), or
you can use your bank’s online bill payment system — the money comes
out of your checking account either way.
Credit required? Debit cards can be used almost anywhere in place of a
credit card — the only exceptions might be for rental
cars and hotel stays.
In those situations, the amount of
your final bill is unknown, so billers may require that you use a credit card.
At the least, they’ll probably put a large authorization hold on your account,
which can tie up funds in your checking account.
Most cards issued with checking
accounts these days are fully-functioning debit cards. However, it’s not
unheard of to have an ATM card that can’t be used as a debit
card. In particular, if your bank account is a savings account — not a
checking account — then your card is most likely only good for ATM use. You’d
still be able to do the following at an ATM:
- Withdraw money
- Make deposits at deposit-enabled ATMs
- Find out how much money is in your account (known as a balance inquiry)
- Transfer funds between accounts
A card for savings? Federal law limits how often you can withdraw funds from a
savings account, but ATM withdrawals do not count against your limit. If you
were to make a purchase with your card (among other types of withdrawal
transactions), you’d be limited to six withdrawals from savings per month. To avoid
problems, most banks don’t provide cards that allow you to spend from your
savings account.
Types
of Cards
It might be helpful to know the
various types of cards available — you can understand what you currently have,
and also find out what you might want to have instead.
ATM cards are the simplest type of card. Again, they can
generally only be used at an ATM for basic banking transactions.
Debit cards, also known as check cards, allow you to spend from your
checking account anywhere cards are accepted. They also do everything that ATM
cards do. Whether you use the card to withdraw cash or make a purchase, funds
are pulled directly from your checking account (usually within a few days).
Learn more about debit cards.
Credit cards allow you to borrow from your credit card issuer.
Funds do not come directly out of your checking account. Instead, you pay off
the card at a later date. It’s best to pay off the entire balance every month
so that you don’t pay interest charges, but you can pay less if you need to
(just be aware of the consequences). Credit cards are
safer than debit cards for everyday spending because:
- They don’t pull directly from your checking account (if your checking account gets drained by a thief, you might have a hard time paying bills like rent and utilities)
- They offer better consumer protection against fraud, limiting your losses to $50 under federal law
Debit cards also provide protection
against fraud and errors, but you have to act quickly, and federal law is not as generous (to you) with debit cards.
The drawback of credit cards is that
you can go into debt — quickly — and interest rates are often high. For more
details, learn about the pros and cons of spending with debit and
credit cards.
Prepaid debit cards are similar to standard debit cards, but they
don’t pull from a checking account. Instead, you “load” funds into your account
with the card issuer (by setting up direct deposit, adding funds with an
electronic transfer or in-person deposit, or using mobile check deposit), and you spend from the
card until you’ve used up the money. You can also withdraw cash at an ATM and
pay bills online with many prepaid cards. You don’t rack up debt with these
cards, and they’re often easy to qualify for – which is attractive if you’ve
had trouble opening a bank account.
The main drawback to prepaid debit
cards is that they can be expensive, and they’re not as useful as a
fully-functioning bank account. If you’re hoping to (or forced to) live life without a bank account, prepaid cards
can be a powerful tool. However, you’ll probably end up saving time and money
if you can get a free account at a local bank or credit union.
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