Debit Cards and Instant Payment
Over the past few decades many banks have been providing their customers with debit cards. These small plastic cards are very similar in appearance to credit cards and most people find that debit cards can be very useful in the same way that they find credit cards of great value. They are used for withdrawing money from ATMs and even making purchases from vendors who then debit the users bank account instantly as opposed to credit cards that give the user standard 30 days credit before charging the account.
Debit cards take different forms. At the most basis level, the debit card is used to withdraw cash from an Automatic Teller Machine (ATM). This avoids the inconvenience of having to wait in a queue inside the bank and it also allows people to withdraw money when the banks are closed. ATMs are also frequently found at shopping centers and airports and other locations where it is convenient for people to have access to cash.
In addition to providing the ability to withdraw cash, the debit cards can also be used in a similar manner to credit cards in the purchase of goods and services. Shopkeepers are able to check these cards electronically before approving the purchase and this limits the opportunity for illegal use of debit cards. Besides direct purchasing where the buyer and seller see each other, debit cards have also become a popular means for buying goods and services over the Internet. Although there have been issues regarding the security of buying through certain sites, a great deal of progress has been made in improving the security of sites so that Internet purchasing becomes another key area where debit cards can be very useful.
A key point to remember is that while purchasing with credit cards is effectively purchasing via a loan of money from the credit card company, a purchase with a debit card is the equivalent of a cash purchase. The amount of the debit card transaction is deducted from the card owner’s bank amount in the same way as it would be deducted after a purchase with a check. People opt to use the debit card to avoid carrying large sums of cash with all the risks that this entails, but if they want to make a delayed payment purchase they use their credit card.
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