What is a Debit Card

Debit cards are also occasionally referred to as 'bank cards' or 'cheque cards', and those terms accurately describe their function and uniqueness.  Essentially, a Debit Card is an electronic cheque!
 
A small plastic card, resembling a credit card in appearance,  a Debit Card is used to make cash withdrawals from a bank account, or to pay for goods and services.  Your Debit Card may be linked to one or more bank accounts, into which you must deposit funds before you can use your card.  A 'prepaid' Debit Card is not linked to a bank account, but is 'loaded' with funds by over-the-counter payment or electronic transfer before use, and can be 'recharged' when necessary.
 
Importantly, when you use a Debit Card, you are spending your own money—not borrowed money (unless the card is linked to an account with overdraft approval). 
 
 To pay for goods in stores, you 'swipe' your debit card through a terminal.  To withdraw cash from your account, you insert it into an ATM.  You can quote the card number (generally with a password or Personal Identification Number) to make purchases over the Internet or telephone.  Many merchants offer 'cash out' or 'cash back' facilities, so that when you swipe your card to pay for your purchases, you can approve a payment for more than the cost of the goods and the merchant will hand you cash change.  Many users regularly request cash when making purchases, because doing so can cut out fees that may be charged for EFTPOS withdrawals.
 
Security is a major concern for shoppers, especially when shopping on-line.  Most debit cards are safe to use, and major Australian banks offer extra security features, including watching for suspicious transactions and guaranteed 100% refund of any unauthorised transactions.  Many banks impose a daily withdrawal limit as a further security measure. 
 
Debit cards are rapidly replacing chequebooks, because of their convenience and ease of use and low costs to use them.  Also, many come with exciting extra benefits like purchase insurance and reward points.
 
Debit cards come in a wide variety of 'flavours', with different features and options and different fee structures.  Some are designed specifically for electronic (Internet use), and no physical card is issued.  There are also special Debit Cards for travel, like Visa Passport, that let you 'load' the card before an overseas trip and withdraw your funds in foreign currency when you arrive at your destination.  These cards have largely replaced travellers cheques, offering superior convenience and security.
 
Card owners are usually issued with a Personal Identification Number used to verify their identity and authority to use the card.  This PIN (generally a four digit number) should be kept secret, and typed into a terminal or ATM or entered on to an Internet form to verify your identity when using the card.  Some Debit Card purchases can be confirmed with a signature.  Both methods provide good security, though it is important for card owners to keep their card somewhere safe and inaccessible to others, and to report any loss at once. 
 
Debit cards are a convenient substitute for credit cards, particularly for those who struggle to remember to pay bills or who find it easy to let spending get out of control.  Debit cards are also a convenient way to provide a fixed spending allowance to a partner,  employee, or offspring, giving them convenient access to funds when needed without the risk of incurring unmanageable debt. 
 
If you like the idea of not needing to carry cash, yet having ready access to your funds any time you need them, check out our guide to choosing the best Debit Card for your needs, and apply for a card now.  Most banks offer Debit Cards with all major savings and cheque accounts - or you can open a new account specifically to use with your chosen card.  Applications are quick and easy, and cards typically issue within a few days and are usable immediately.