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Credit Card Glossary: Debit Card

Debit Card

You may use a debit card in much the same way as a credit card but instead of receiving credit after making your purchase, the funds are automatically (within a few days usually) withdrawn from your bank account.

Debit cards effectively aim to replace cash and cheques for many smaller transactions. Introduced on a large scale in the U.K. in the mid 1980s, they are a banker's dream because in replacing cash and cheques, they offer the hope of cutting banks' processing costs (cash and cheques remain costly for banks to process).

Most debit cards can be used to purchase goods and services in shops, via mail order and to withdraw cash at home and abroad from ATMs (cash dispensers). As of October 2017 there were 98.5m debit cards in circulation in the UK. It can be argued that debit cards have some advantages over credit cards - for one consumers retain more control and don't spend money they haven't got.

See also: Financial Services