Definition: A plastic, wallet-sized card you can use to pay for purchases at many stores. When you swipe it through the card reader at the checkout counter, the amount of your purchase is taken out of the bank account whose number is magnetically encoded on it. To confirm your identity, you will either be asked to enter a previously-selected personal identification number (PIN) or to sign a receipt listing what you are purchasing.
Example: Chase bank offers a Disney Rewards Debit Card. By using the card, holders can earn Disney Dream Reward Dollars. These can be used to pay for tickets, hotels, and other things at Disney’s resorts.
Investeach explains: A debit card is a convenient form of payment that prevents consumers from getting ahead of themselves. Because the card is tied to a bank account, the card owner cannot use it to make purchases for more than is in his or her account. Debit card purchases should be entered into a person’s checkbook register to ensure that it stays accurate.
Depending on your preference, your debit card may also be used at ATM machines to take out cash and perform other banking functions.
Riddle me this:
1. How does a store ensure that it is indeed you who is presenting your debit card?
2. What happens after you use your debit card to make a purchase?
3. What is important to do after using your card to ensure you know what’s left in your bank account?
4. Why does a debit card keep us from being out-of-control spenders?