What Is a Debit Card and How Does It Work?

Key insights:

• A debit card draws funds directly from your checking account to pay for purchases
• It offers a convenient way to buy items or perform transactions at an ATM, such as withdrawing or depositing funds
• Unlike a credit card, a debit card does not borrow money from a lender and does not impact your credit score
• It can be added to a digital wallet, such as Apple Pay, Samsung Pay or Google Wallet for convenient contactless payments

When you don’t have cash on hand, a debit card offers direct access to your funds by tapping, swiping, inserting or through your digital wallet. It’s a convenient payment option that can help to make everyday transactions smooth and seamless.

Read on to learn more about what a debit card is, how it works differently from credit and prepaid cards, and how to get one.

What is a debit card?

A debit card is a digital or physical payment card that’s linked to a bank account, typically a checking account, and allows you to make purchases or cash withdrawals at ATMs. When you make a purchase or withdraw cash with a debit card, you draw on the funds in that account. In most cases, your purchase or withdrawal cannot exceed your current balance.

Benefits of using a debit card

• Convenience: Debit cards offer a simple way to make purchases without cash or perform transactions at an ATM.
• No interest charges: Unlike a credit card, there is no interest charged on debit card purchases.
• Can help you stay on budget: Since debit cards draw directly from your bank account rather than a line of credit, they may help you avoid overspending.

Cons of using a debit card

• Does not build credit: Since you use your own money when you spend with a debit card, it doesn’t impact your credit score.
• Less protection: Compared to credit cards, debit cards generally offer fewer protections against fraudulent transactions and lost or stolen cards.
• Potential fees: Fees may apply with a debit card, such as when you use an out-of-network ATM. Some banks may also charge a monthly service fee for maintaining your account.

How does a debit card work?

You typically receive a debit card when you open a checking account at a financial institution. A debit card allows you to access the money in your account without having to go to the bank or write a check. You may use your debit card to make purchases (both online and in person) and to perform transactions at an ATM, such as withdrawing or depositing funds.

Debit cards have magnetic strips, just like credit cards. They also feature Chip-and-PIN technology, designed to help make transactions more secure and reduce fraud risk. Many debit cards have tap-to-pay capabilities and can be added to a digital wallet, such as Apple Pay, Samsung Pay, or Google Wallet.

If you use your debit card at a vendor or ATM, you may have to enter your PIN to authenticate the transaction.

How do you get a debit card?

There are 2 main ways to get a debit card:

• Open a checking account: Typically, when you open a checking account, your bank will automatically mail you a debit card.
• Contact your bank’s customer service: If you didn’t receive a debit card when you opened your checking account, reach out to your bank’s customer service team and request one.

How debit cards compare to other types of payment cards

Debit cards vs. credit cards

The primary difference between credit and debit cards is that, while credit cards provide access to a revolving line of credit, debit cards are directly linked to your checking account.

When you buy something using your credit card, you’re borrowing money from the credit card issuer to pay for that purchase. The issuer will send you a bill each month for all the purchases you’ve made with your credit card.

On the other hand, when you purchase something with a debit card, your checking account is debited for that amount almost immediately. You don’t receive a bill or pay a monthly balance.

Debit cards vs. prepaid cards

While debit cards are linked to your bank account, prepaid cards (sometimes called prepaid debit cards) are cards you purchase with a preloaded amount. Like debit cards, you may use prepaid cards to make purchases in person or online.

While your bank may cover a transaction when you have insufficient funds in your checking account (depending on your bank, whether you’ve opted for overdraft protection and the type of payment), you typically cannot spend more than the amount you’ve loaded onto a prepaid card. Unlike debit cards, prepaid cards may charge fees for transactions such as cash withdrawals at ATMs.

Debit card FAQs

Can you have a debit card without a checking account?

Most financial institutions offer a debit card only when you open and maintain a checking account with them. For example, Citi cannot issue a debit card to a customer without a checking account.

Can you have multiple debit cards for 1 checking account?

It depends on the financial institution. Some banks may allow multiple debit cards for 1 checking account. Joint accounts typically come with a debit card for each account holder.

What should you do if your debit card is lost or stolen?

Immediately contact your bank’s customer service, report your card as lost or stolen and request a replacement. Depending on your financial institution, you may be able to do this over the phone, through the bank’s app or via your online account.

Is an ATM card a debit card?

An ATM card is similar to a debit card but functions a bit differently. Both ATM cards and debit cards allow you to withdraw and deposit funds at ATMs. But while a debit card allows you to make purchases directly at cash registers and online, an ATM card typically does not.

Is a debit card a checking or savings account?

A debit card is a physical or digital payment tool, not an account itself. It’s most commonly linked to a checking account, which is where your actual funds live. When you swipe, insert or tap your debit card, funds are debited directly from your checking account to cover your transaction.

What is a digital debit card?

Some banks may offer a digital debit card that gives you immediate access upon account opening or card replacement. Your card details — including your card number, CVV and expiration date — are typically available through your bank’s mobile app or online banking. While you wait for your physical card to arrive in the mail, you can use your digital debit card to make online purchases or add it to your digital wallet for contactless payments.

What is cardless ATM access?

Some banks may offer you the ability to access their ATMs without the need for a physical debit card. Instead, they allow you to use your bank’s mobile banking app or digital wallet when accessing their ATMs.

Does a debit card offer any rewards or merchant offers?

Some banks may offer rewards, including cash back, points or merchant offer rebates, to debit card holders. These may be automatically applied or available through enrollment in specific merchant offers. You can typically browse and add offers in your bank’s mobile app or online banking site before making a qualifying spend transaction.

Explore debit card options with a Citi checking account

Debit cards offer an accessible way to use your funds without carrying cash or writing checks. From running errands to paying bills online, they can help to make your daily routine more convenient.

If you’re interested in getting a debit card, consider exploring Citi’s checking account options. Compare accounts and available debit card features to find the right option for you.

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.