Credit Card vs. Debit Card

Although you have a card in you wallet that says "Visa" or "MasterCard" if it is a debit or check card, then it is not really a credit card. Check cards are different from credit cards in a couple of ways. First, check cards or debit card transactions are immediately deducted from your bank account at the moment you use them. You do not receive a monthly bill, with a payment due and an interest charge because you are not charging anything. Unlike a credit card, your "credit limit" is the same as the amount of money in the bank account that is tied to the card.

Most debit cards and many credit cards can also be used at major ATM (Automatic Teller Machine) networks around the world. When you withdraw your money using your debit card, you are charged a transaction fee (unless you are using your own bank's machine), and you instantly receive cash that is electronically deducted from your bank account. When you withdraw money from an ATM using your credit card, you are taking out a "loan". You will be charged a transaction fee by the ATM network, as well as a "cash advance" fee by your credit card issuer, and you will be subject to the card issuer's interest rate for cash advances which may be higher than the interest rate for normal purchases.

As far as the mechanics of making a purchase go, you can use your check card as either a credit card or a debit card. That way, if you are shopping in a store that does not have the equipment to process debit card transactions but accepts the credit card that matches the type of bank card you are presenting (usually Visa or MasterCard), you can still shop there. Even though you use it as a charge card, you are still bound by the amount of money in your bank account, and it is still taken out of that account immediately. So, it is not really a charge; it is still a debit.

Some banks issue ATM cards that are not check cards. ATM cards are usually valid only at ATM machines and sometimes, at selected merchants that have made special arrangements with the issuing bank. While a check card has your name, account number, the bank's name and logo, and a major credit card issuer's logo on it, an ATM card usually has your name, account number, and the bank's name and logo. The credit card issuer's name and logo are missing.

If you have an ATM card only, and think you need a check or debit card, you can probably apply for one from your bank. While some banks issue them automatically, others have certain requirements that must be met first. Each bank has its own policies so it is best to check with yours.

One thing to be very careful about when using a debit card, is fraud. Should someone find and use your card, or get hold of your card's information, they can clean out your bank account in minutes. Even though you will likely only be responsible for the first $50 in losses, you may find yourself without use of the missing money for several weeks while the investigation is conducted.