Ever wonder what is “check visa card”, “master money card”, “check card” etc? They are simply debit card. And what is debit card? In case you do not know it yet, transaction using debit card works almost in the same manner as credit card except there’s a huge different:

Let’s say you have $1000 checking account in your favorite bank, and then you spend $200 for a sophisticated gadget, jewels, car rental, etc.. You name it. And if you pay:

1. Using credit card, you are purchasing now pay later. You have the goods in your hand and your $1000 intact. It will remain that way until you get your billing statement and pay the debt.

2. Using debit card, by the time the transaction is authorized your $1000 now is $800. This is purchase now pay now scheme but without bringing your cash with you

And if you go to ATM and withdraw cash:

1. Using credit card you’ll be charged for a high interest fee.

2. Using debit card there will be no interest fee.

And if you swipe your card:

1. Using credit card you’ll be asked for your signature

2. Using debit you’ll have to enter your PIN or your signature.

Another major different between debit vs credit card, using debit you are saved from debt. Obviously you can’t spend anything if you have noting to spend while using credit although you are running out of cash, as long as you haven’t reach your credit limit you still can shop something. You just have to worry when the next financial month comes and you get your billing statement.

At this point, does debit card sound more convenient? Maybe, but you may interest to know that against fraud debit card has a higher risk. Credit card has what it called “credit limit”, maximum amount you can spend using your credit card. Say your credit limit is $10,000 then if your card is fraud the thief won’t be able to steal more than $10,000.

But debit card knows no limit except minimum low balance account. Say you have $700 in your checking account with minimum balance is $10, if your debit card is fraud the thief can pull out all $690 and leave the $10 for you. Some of you may argue “hey at least I still have 10 bucks” but $10 against $690? I prefer i keep the $690. You may report to bank which then investigates it but the process can take days, weeks or months while you need to live. You have children to feed, debt to pay, food to buy but you are without your money. If it is your credit card, though you still have to fight with your bank, you still have your money with you.