What it is Debit Card

Definition: Debit cards are similar to credit cards, except debit cards pull money out of your checking or brokerage account. Debit cards do not create or increase a loan like credit cards do.
Where to Use Debit Cards
You can use debit cards very much like a plain old credit card. Many retailers will allow you to use a debit card at checkout just like a credit card. You just swipe it and you're done. However, sometimes you have to let the retailer know you're using a debit card.
You can choose to have your purchase processed as a "debit" or "credit" transaction. To see which is best, read Should You Choose Debit or Credit?.
Debit Cards and the ATM
For some people, the main reason to have a debit card is to use it at an ATM. For a while, banks issued "ATM Cards" which were only useful if you were standing in front of an ATM trying to take out cash. Eventually, banks started to add more features so that a debit card can now be used at almost any location.
Debit Cards and Bad Credit
For those with bad credit, debit cards are a very useful tool. You can function as if you had a credit card, meaning you don't have to carry cash around with you. However, because a debit card pulls against money in the bank, you can typically qualify for one if your credit has some blemishes. However, they don't help you build credit.
Debit Cards and Kids
Debit cards can be a good tool for helping children understand how credit cards work. Most important lesson: debit cards have a limit that you have to manage. Credit cards also have limits, but they tend to be more flexible than debit card limits.
Debit Card Conclusion
Debit cards are a handy day-to-day tool.
Also Known As: Check card. ATM Card. Gift cards act just like debit cards -- with a finite limit that gets depleted.
Examples: I paid with my debit card.
Debit Card Resources
Checking AccountsChoose Debit or Credit?Overdraft Protection Plans
More Resources
Set Up Direct DepositTeach Children to SaveHow to Earn Interest With Free Checking