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Debit Card Definition
In general terms, Debit card is a plastic card which allows or provides the customers with an electronic access to their funds immediately from his or her bank accounts at a financial institution or for any purchase. In the transactions made from the debit card, the amount of a purchase is withdrawn from the available balance in the cardholder’s account. If the funds are insufficient in the bank account during the transaction made, then the transaction is incomplete. In functional terms, a debit card is can be also called as an Electronic Check as the funds are withdrawn directly from either the bank account or from the remaining balance on the card which is popularly known as the prepaid cards (defined according to the functionality like the Petro Card, Smart Card etc). The debit card is also called as Asset Card or Payment Card.
These cards are accepted where can be used instead of cash payments when making purchases. In some of the cases, the primary account number is being assigned exclusively for the use on the internet and there is no physical card. A debit card is an electronic card which is being issued by a bank and which allows the bank clients to access their account to withdraw cash or pay goods and services. This kind of card service removes the need for the bank clients to go to the bank to remove the cash from their account as they can now just go to an Automated Teller Machine (ATM) or make the payments directly at the merchant locations. Debit Card payments, is a form of payment, which removes the need for checks as the debit card immediately transfers money from the client’s account to the business account.
The major benefits of the debit cards are as follows:
a) Convenience and Security
c) A safer form of payments as a code is required to access the account funds.
d) A debit card may be used to obtain cash from an ATM or a PIN-based transaction at no extra charge and no extra charge on the merchant purchasing as well.
The drawbacks associated with the debit cards are as follows:
a) The use of a debit card is usually limited to the existing funds in the account to which it is being linked.
b) Some of the banks charge an over-limit fee or non-sufficient fund fees based upon pre-authorizations and even attempted but refused transactions by the merchant.
