A payment card that is linked directly to a customer’s bank account. Some cards require a personal identification number. Others require a customer’s signature. A PIN-based or direct debit card removes a purchase price from a customer’s checking account almost immediately. A signature-based or deferred debit card has a Visa or MasterCard logo and removes the purchase price from a customer’’s bank account in two or three days.
Since a debit card is linked to a bank account, debit cards have all the advantages (and disadvantages) of a checking or savings account. This usually includes federal deposit insurance and protections if you lose your card. Just like with a checking account, it is important to track your spending with debit cards. With many debit cards if you spend more than you have in your bank account you can “overdraw” your account and be charged a high fee. A debit card account can be a great alternative if you are on the ChexSystems list, as many debit card issuers don’t care if you are on ChexSystems.
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