Definition:
Debit cards function similarly to credit and charge cards, but with an important difference: whereas charge cards allow you to purchase on credit but your balance must be paid every period, and credit cards allow you to pay things off over time, debit cards withdraw funds immediately and automatically from a linked account, usually a checking account. With a debit card there is no ability to finance payments since the card only uses available liquid funds, not credit. Overdrafts - charges that exceed the balance of the linked account - are either rejected or, if they are covered, they are often heavily penalized, though recent changes in banking laws require you to opt-in to overdraft protection.
