4 Things to know about how debit cards work


Both debit and credit cards look the same but work in different ways. For you to be able to use them effectively, you need to know how do prepaid debit cards work? This will help you avoid any unforeseen future implications. Below are four things to know about how debit cards work.

Where are Debit Cards used?

Like credit cards, debit cards are used to pay for items, but only allow you to spend money that you already have in your account. This is because the money comes out of an account that’s normally linked to the card or money that you might have loaded onto the card. The money can be used for certain payments like shopping, but they don’t increase your debt burden the way credit cards do.

Credit cards use money that you borrow, which can have negative impacts on your account. A debit card is usually given by your bank or credit union when you open an account. A debit card can be in the form of either a Visa or a MasterCard Debit, although the Visa debit is the most common.

Being able to use them to shop does not mean that you can use debit cards anywhere. You first need to inquire from the retailer if they accept payments using a debit card. When shopping either from an online store or any walk-in store, there are shops and stores that will allow you to use a debit card at checkout the same way you would with a credit card. They simply swipe it or if you are making an online payment, you will be required to fill in some details and then you're done.

Debit Cards with the ATM

Some people use a debit card at ATMs. This is because debit cards have features that make you able to use them for various purposes and at almost any location. A debit card might protect you against fraud. However, you must be careful, especially when using your debit card online.

They offer an alternative even if you a bad credit

If you have a bad credit and cannot use your credit card, a debit card can be a very useful tool rather than carry cash around with you. You can function as if you had a credit card and use it for shopping even if you don't have a credit card. However, a debit card will not help you build credit or take away your bad credit score. Also, if you can't open a bank account because of a bad credit, you can still use a prepaid card.

You can use it to teach your kids

Debit cards can be used to teach your kids how to be responsible with their finances. This is because they have a limit that you have to manage. By using a prepaid card and a debit card you can give your child the view of money from both vantage points. This ensures that your child learns how to handle both debit and credit cards responsibly.

Many people prefer using a debit for payments instead of carrying a large amount of cash around since it is more convenient, although there are some disadvantages to this. One limiting factor for using a debit card, especially for online payments is that in case your card information is stolen, thieves can easily use it and drain your account.


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