How debit cards work

Debit cards are linked directly to your bank account. You can use them to buy goods or withdraw cash and the amount is taken from your account right away.

You can also use debit cards to get 'cashback' from certain shops (you buy goods and also ask for money back from the cashier). The total amount is deducted from your account right away.

When using a cash machine or paying for goods with a debit card you'll need to enter your PIN (personal identity number). When buying goods you usually enter it into an electronic hand held device, but in some cases you may have to sign.

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.
What happens if there's not enough money in your account?
This will depend on the type of debit card you have:

if you have a ‘Solo’ or ‘Electron’ debit card the balance in your account is checked before each transaction – if there’s not enough money you won’t be able pay or withdraw cash with the debit card without prior agreement
if you have ‘Switch’, ‘Visa’ or ‘Delta’ card your account balance won’t necessarily be checked and the payment may still go through
If you go overdrawn the charges you’ll pay will depend on whether or not you have an authorised overdraft arrangement with your bank. If you do, you’ll pay the agreed amount of interest at the end of each month. This is usually much lower than interest charged on credit cards.

If you don’t have an overdraft agreement, or you exceed the agreed limit, your bank may allow the payment to go through but you’ll usually pay much higher fees than if you had an agreed overdraft.

Using a debt card over the phone or internet
Debit cards can be used to make payments by phone or over the internet. In this case you'll need to provide certain details that are printed on your card.

Find out more and view an example debit card on the FSA website.