Debit Cards

Debit cards are an alternative to credit cards or cash, but have the benefits of both financial approaches. In fact, the debit cards can often be referred to as the electronic check as it allows the owner to withdraw funds directly from either a bank account or from a set amount allocated to the card.

Debit cards are linked directly to your bank account and can be used to buy goods or withdraw cash and the amount is taken from the card holder's account right away.

Debit cards have proven highly preferable when it comes to internet or telephone transactions, especially for international transactions. Debit cards act as an ATM card in the form of instant cash withdrawal.

Most bank accounts offer debit cards. Most debit cards double up as 'cheque guarantee cards', guaranteeing that your cheque will be honoured by your bank up to a stated amount. Those people most interested in a Debit Card can be those who have no previous credit history such as university students especially with some cards being able to be controlled by a third party such as a parent for owners who of a younger age. Expatriated workers may also use Debit cards to send money home to their families holding an affiliated debit card.

Debit cards popularity is also based on its level of security protection against loss, theft or unauthorized use while a stored-value card, which is similar to a debit card, does not offer such protection due to their anonymous nature.

Types of Debit Cards

Typically, debit cards fall under either the Visa or MasterCard brand; although there are a range of other forms of debit cards depending on the region the card holder lives in. This is particularly true for differing countries with Australia's majority of debit cards being Visa debit cards and MasterCard debit cards.

Debit cards themselves can be either online or offline depending on the card holders' preference, although in both cases the card holders account is directly charged. It is also important to note that some cards can be limited to being purely online or offline while others are enabled for both kinds of transactions.

Online Debit Card - this type of debit card has a more secure form of authentication system and live status meaning that the card holder will not have any problems with slow processing. Online debit, as known as PIN debit, require electronic authorization for every transaction with all debit shown immediately on the card holders account. The online debit card account may also have a personal identification number (PIN) for additional authentication control. Due to this additional security the online debit card is generally viewed as superior for card holders. Furthermore, online debit cards may also employ a signature for identification.

Offline Debit Card - This type of debit card retains the logos of major credit cards such as Visa or MasterCard and is used at point of sale like a credit card. However, offline debit cards are not compatible with the PIN system in several countries meaning that only the signature verification system is used, leaving a chance for forgery and unauthorized charging. Offline debit cards transactions typically take up to 3 days to show on a card holder's balance, similar to a secured credit card. Within Australia offline debit card transactions will actually be referred to as "credit" transactions as they are processed through Visa or MasterCard and can be performed worldwide. In some cases an offline debit card a PIN will be issued for purposes of internet banking.

Further differences between online and offline debit cards include online debit cards allowing card holders to withdraw cash in addition to the amount of the debit purchase while merchants pay lower fees on online debit transaction as compared to offline debit transactions.