A debit card is a payment card that deducts money directly from the cardholder’s checking account. It is a convenient and secure way to make purchases and withdraw cash without having to carry cash or checks.
Features of Debit Cards
- Debit cards are linked to the cardholder’s checking account. This means that when a customer uses a debit card to make a purchase, the money is immediately deducted from their checking account.
- Debit cards can be used to make purchases at both brick-and-mortar stores and online. To make a purchase at a brick-and-mortar store, the customer simply swipes their card and enters their PIN number. To make an online purchase, the customer enters their debit card information, including the card number, expiration date, and CVV code.
- Debit cards can also be used to withdraw cash from ATMs. To withdraw cash from an ATM, the customer inserts their debit card and enters their PIN number.
Benefits of Debit Cards
- Debit cards are convenient. They allow customers to make purchases and withdraw cash without having to carry cash or checks.
- Debit cards are secure. They are protected by a variety of security features, such as PIN numbers and encryption.
- Debit cards are affordable. There are typically no annual fees associated with debit cards.
MCQs and Answers
1. What is a debit card?
(a) A payment card that deducts money directly from the cardholder’s checking account. (b) A payment card that allows cardholders to borrow money from the card issuer. (c) A payment card that can be used to make purchases and withdraw cash at ATMs. (d) All of the above.
Answer: (d)
2. What are the benefits of using a debit card?
(a) Convenience (b) Security (c) Affordability (d) All of the above
Answer: (d)
3. How does a debit card work?
(a) When a customer uses a debit card to make a purchase, the money is immediately deducted from their checking account. (b) When a customer uses a debit card to make a purchase, the merchant sends the transaction information to the customer’s bank. The customer’s bank then approves the transaction and deducts the money from the customer’s checking account. (c) Both (a) and (b) (d) None of the above
Answer: (c)
4. What are some of the security features of debit cards?
(a) PIN numbers (b) Encryption (c) Fraud protection (d) All of the above
Answer: (d)
Conclusion
Debit cards are a convenient, secure, and affordable way to make payments and withdraw cash. They are a good option for people of all ages and income levels.