Debit CardsA debit card, sometimes called a check card (because it is similar to a check in that it allows you to access the money in your checking account), is very similar to a credit card. In fact, many have a 16-digit number and a Visa or Mastercard logo and can be used like a credit card for purchases, with the major difference that the money still comes out of your account right away - you don't have the option of paying off your purchases later. A debit card is what you use to make purchases at stores when you want the convenience of plastic (as opposed to cash or checks) but want to pay immediately instead of accruing a balance on a credit card.
Debit cards are also how you withdraw cash from your checking account through an automated teller machine (ATM). To access your money this way, you'll need to use apersonal identification number (PIN) that you can establish when you open your account or that the bank will assign to you. PINs provide an added layer of protection if your card is lost or stolen, so you should choose a PIN that would be difficult for someone else to guess. Memorize this number (definitely don't write it on your card), and never tell it to anyone. If you have to write it down somewhere, keep this information at home, not in your wallet or purse.
In addition to using your PIN to make ATM withdrawals, if you select the debit option when using your debit card to make a purchase at a store, you'll need to enter your PIN then as well. If your debit card has a credit card logo, you may be better off selecting the credit option to minimize the possibility of a stranger watching you enter your PIN. Some banks have a preference for whether you select debit or credit at the register when using your debit card to make a purchase; they may reward you for selecting their preferred option and/or penalize you for doing the opposite, so make sure to read the terms, conditions and fee schedule of your checking account agreement.
Some cards, however, do not have 16-digit credit-card-like numbers and do not have a credit card logo. These cards can only be used to withdraw cash from an ATM and cannot be used to make purchases. These are known as ATM cards, rather than debit cards.
ATMsAutomated teller machines allow you to make deposits and withdrawals without visiting a bank teller. Lines are usually shorter (or nonexistent), you can access your cash even when the bank itself is closed, and there's no human interaction involved. ATMs can be found at banks, in grocery stores, in airports, in hotels, in clubs, in restaurants, in gas stations, and at a few other places. If you use an ATM at any branch of your bank, it will be free.
Use another bank's or a store's ATM, however, and it could cost you. Generally, the company that owns the ATM will charge you a fee, and your own bank will also charge you a fee. These fees will usually only be a couple of dollars each, but they can add up over the course of a month or year and are an unnecessary expense. Some banks will waive a couple of these fees per month, and if you have an online checking account, you may be able to use almost any ATM without incurring any fees.
If you plan to use an ATM frequently, it might save you money to open your account with a major bank that has ATMs everywhere or open an online checking account that allows liberal, fee-free use of other banks' ATMs. If you're good at anticipating your cash needs ahead of time, or if you frequent stores that allow you to get "cash back" when you make a purchase with your debit card, ATM ubiquity need not be a factor in your choice of bank.
One drawback of relying on ATMs is their daily cash withdrawal limits. While you shouldn't have any problems withdrawing a large amount of cash from your account if you visit a teller, you usually won't be able to withdraw more than a few hundred dollars a day from an ATM.
Debit cards are also how you withdraw cash from your checking account through an automated teller machine (ATM). To access your money this way, you'll need to use apersonal identification number (PIN) that you can establish when you open your account or that the bank will assign to you. PINs provide an added layer of protection if your card is lost or stolen, so you should choose a PIN that would be difficult for someone else to guess. Memorize this number (definitely don't write it on your card), and never tell it to anyone. If you have to write it down somewhere, keep this information at home, not in your wallet or purse.
In addition to using your PIN to make ATM withdrawals, if you select the debit option when using your debit card to make a purchase at a store, you'll need to enter your PIN then as well. If your debit card has a credit card logo, you may be better off selecting the credit option to minimize the possibility of a stranger watching you enter your PIN. Some banks have a preference for whether you select debit or credit at the register when using your debit card to make a purchase; they may reward you for selecting their preferred option and/or penalize you for doing the opposite, so make sure to read the terms, conditions and fee schedule of your checking account agreement.
Some cards, however, do not have 16-digit credit-card-like numbers and do not have a credit card logo. These cards can only be used to withdraw cash from an ATM and cannot be used to make purchases. These are known as ATM cards, rather than debit cards.
ATMsAutomated teller machines allow you to make deposits and withdrawals without visiting a bank teller. Lines are usually shorter (or nonexistent), you can access your cash even when the bank itself is closed, and there's no human interaction involved. ATMs can be found at banks, in grocery stores, in airports, in hotels, in clubs, in restaurants, in gas stations, and at a few other places. If you use an ATM at any branch of your bank, it will be free.
Use another bank's or a store's ATM, however, and it could cost you. Generally, the company that owns the ATM will charge you a fee, and your own bank will also charge you a fee. These fees will usually only be a couple of dollars each, but they can add up over the course of a month or year and are an unnecessary expense. Some banks will waive a couple of these fees per month, and if you have an online checking account, you may be able to use almost any ATM without incurring any fees.
If you plan to use an ATM frequently, it might save you money to open your account with a major bank that has ATMs everywhere or open an online checking account that allows liberal, fee-free use of other banks' ATMs. If you're good at anticipating your cash needs ahead of time, or if you frequent stores that allow you to get "cash back" when you make a purchase with your debit card, ATM ubiquity need not be a factor in your choice of bank.
One drawback of relying on ATMs is their daily cash withdrawal limits. While you shouldn't have any problems withdrawing a large amount of cash from your account if you visit a teller, you usually won't be able to withdraw more than a few hundred dollars a day from an ATM.
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