How does debit and credit card exactly work?

Question

I just recieved a debit/credit card from downey savings(my bank) and i activated and all and now i need to know how it works. I gues when you use debit the money comes out of you checking acount, but what about when i select credit, what happens then, if i dont have any money on my checking acount, will they just send me payments with % every month for how ever long.

Answer 1

While a lot of people gave great explanations, I would like to add that when you have a DEBIT card you can process the payments either as a debit or as a credit. If you use it as a debit, for the most part you have to input your PIN when you use it at a POS (point of sale) machine, like at Wal-Mart or such. If you run it as a credit, you don't need to input your PIN.

The merchant is the one that gets charged differently depending on how it is processed.

Think of your debit card as a check (but the transactions are posted immediately or almost immediately depending on the bank)

I use mine all the time and love not writing checks.

Answer 2

It's just a fancy way for you to use your card "as if" it were a credit card. What does that mean? It means that instead of taking the money out "immediately," which is what happens when you use the card as an ATM card at the store or fast food restaurant, it processes the card as a "charge" and the money is transferred to the company through a Visa or MasterCard payment service.

And since Visa or MasterCard are the processing companies you can use it anywhere that Visa or MasterCard are accepted. Unlike an ATM card which many places (like restaurants or movie theaters) don't take.

If you use your card as a credit card it takes about 48 hours for the money to come out of your account. But if you don't have enough funds some banks will process it and charge you an overdraft fee. Some banks won't allow it to go through at all.

Confusing isn't it? Bottom line - if you haven't got the money in your account don't use the card either way just to be safe!

Answer 3

You do not have a debit/credit card. You have a debit card also called a check card. It pulls money from your bank account. If you don't have money in the account to cover it, you will get an overdraft fee just like you would if it were a check that bounced.

You have the option of processing purchases as a debit card (use your PIN) or credit (you sign the sales slip). Even if you process as credit, it still takes the money out of your bank account.

Answer 4

CREDIT CARD
Issued by a Bank as a loan with a credit limit. Card is used worldwide to purchase goods and services where you see the Visa and MasterCard logos. You are charged interest for the money you borrow.

DEBIT CARD
Issued by a Bank. The funds are DEBITED from your personal checking account for the goods and services that you make BUDGET for your INCOME and EXPENSES.

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Also I recommend that you visit your local Bank or Credit Union and speak with a Personal Banker to get some FREE advice on Debit Cards and Credit Cards, usage, benefits, features, costs, etc.

Get more information at:

www.wellsfargo.com

www.bankofamerica.com

www.chase.com

www.usbank.com

www.wachovia.com

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Use credit wisely and start SAVING and INVESTING as well.

Hope these suggestions also help you!

GOOD LUCK! :-)

Answer 5

You should have recieved the terms of the credit card in the same envelope. The credit part works like a credit card. They should have listed what your credit limit is and the interest rate you will be charged. If they didn't include this, do yourself a favor and call the bank for an explanation BEFORE you use it--

Answer 6

The card will work where ever the credit card is excepted. However, it will deny the charge if your bank account is empty. Think of it like you have reached the limit on your card.

I like mine because I can use it like a credit card, but I can never spend more than I have because the bank account won't let me.

Answer 7

Yes

Answer 8

The credit part is just like any other credit card. When you use it , it is a loan that you will have to pay intrest and a minimum monthly payment on.