Podcast Beta
Questions and Answers
Debit cards are the most popular form of payment in the U.S. according to Federal Reserve data.
False
Traditional debit cards allow you to spend money beyond what you have in your account.
False
Debit cards are primarily issued by Visa and Mastercard.
False
You can deposit money into your linked checking or savings account using only cash deposits at your bank or ATM.
Signup and view all the answers
Debit cards work by deducting the cost of your purchase directly from your associated account when used for transactions.
Signup and view all the answers
Debit cards are more likely to charge fees than prepaid cards.
Signup and view all the answers
Debit cards can help you build a credit history and score.
Signup and view all the answers
Using a debit card at an in-network ATM can sometimes result in ATM fees.
Signup and view all the answers
Prepaid cards require you to have a bank account to use them.
Signup and view all the answers
Debit cards offer the same security level as credit cards when it comes to overspending.
Signup and view all the answers
Study Notes
Debit Cards
- Offer convenience and security, with fewer fees compared to prepaid cards
- Help with managing money by limiting spending to available funds
- Can't spend more than what's in the account, teaching budgeting lessons through overdraft fees
Downsides of Debit Cards
- Won't help build credit history or score, as they're not loan products
- May not qualify for a debit card if you have a poor banking history
- May be associated with checking or savings account fees, although avoidable
Who Should Use a Debit Card?
- Convenient for those who want to avoid credit cards
- Helpful for parents wanting to give kids money to manage
- Useful for withdrawing cash from in-network ATMs, avoiding ATM fees
Prepaid Cards
- Offer non-cash payment option with available funds
- Don't require a bank account
- Suitable for those without access to a bank account (approximately 5.9 million U.S. households)
Debit Card Facts
- 30% of U.S. payments in 2022 were made with debit cards
- Most commonly used payment method after credit cards
- Debit cards are linked to checking or savings accounts, drawing on available funds
- Cannot make purchases beyond available funds, risking overdraft or insufficient funds fees
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Learn about debit cards, the most popular form of card payment in the U.S. Discover the differences between debit and credit cards, and how they are issued by financial institutions. Find out interesting statistics on the usage of debit cards.
