You might also incur a replacement card fee if yours is lost, damaged, or stolen, and a foreign transaction fee, if you buy something in a foreign currency. Note: All this applies to regular debit cards, which pay with funds drawn on your checking account. A prepaid debit card , which has a set amount of money stored on it, is different—in fact, it's almost a different animal altogether. A prepaid debit card is akin to a gift card : It allows you to spend a sum that's been loaded onto the card until the balance is used up.
Some of them are refillable, so they can be used indefinitely, like regular debit cards. Unlike their regular cousins, though, prepaid debit cards often come with a passel of extra charges: monthly fees, transaction fees, ATM fees, reloading fees, foreign transaction fees—sometimes even a fee for checking your card balance.
Given that many bank debit cards are being issued by credit card companies, the distinction between credit and debit cards can seem as thin as, well, a piece of plastic.
Aside from the word "debit" on its front, a debit Mastercard looks identical to a credit Mastercard, for example, and "can be used anywhere Mastercard is accepted.
A debit card bearing the logo of a credit card issuer offers many of the same consumer protections , such as not holding you liable for fraudulent purchases made by someone swiping your card number. But credit cards and debit cards work in fundamentally different ways.
Using a debit card to make a purchase is like writing a check or plunking down dollar bills: You're paying for the item then and there, drawing on funds in your bank account. When you use a credit card, you're essentially borrowing money from the card company for the item. It pays the merchant, then bills you for the amount. You repay it when you get your monthly statement. If you don't pay the whole amount, you pay interest on the remaining portion, as you would with any loan.
You can get cash with both debit and credit cards. But again, when you get it from a credit card you're borrowing money—as the term for it, "cash advance," implies.
If you use your credit card to get cash at an ATM, the money isn't coming out of your bank account, it's coming from your credit card account. And you pay interest if you carry a balance—that is, don't pay it back right away or sometimes even if you do. You don't carry a balance on a debit card, because each and every time you use it, you're paying for the item in full, or taking out money that already belongs to you.
The big advantage is, debit cards don't put you into debt—you can't spend more than you have. The downside is you are limited to how much you have in your account. That makes credit cards a better option for large purchases you want or need to finance.
With debit cards, consumers are effectively making their purchases in cash—that is, with money they actually have, as opposed to money borrowed on credit. But they are considerably safer than cash. Debit cards are easier to get if you have poor credit—as long as the bank lets you set up an account, you're in—and you don't have to apply for them, as you do with credit cards. Nor do you pay annual fees. Because debit cards don't charge merchants much, merchants don't impose minimum-purchase amounts on debit cards, as they often do with credit cards.
Note that debit cards generally don't offer as many perks, or have as many protections against fraud, as credit cards. For one thing, if an identity thief gets into your actual bank account and withdraws funds, you lose the money immediately. Getting it refunded can be tough. Also, your expenditures on the debit card are limited to the money you have in the bank. And what with auto-bill pay, auto deposits, and ATM withdrawals, it can be hard to remember how much is in a checking account at any given time, making it tricky to use a debit card for purchases.
Your card could be declined, or you may incur overdraft fees. They also let you buy goods and services. If they come from a credit card issuer, they might offer the cashback programs and other privileges associated with regular credit cards. It can vary, depending on the issuer, but generally, debit cards do not offer purchase protection, or as much purchase protection, as credit cards do. The amount you are responsible for if your card is stolen or used illegally is much larger, and the time frame for reporting it much smaller, with debit cards.
Yes, you can get a debit card online at any financial institution that lets you open a checking account online. This applies to online banks, of course, along with brick-and-mortar banks that sign people up digitally.
It depends on the bank. At most financial institutions in the U. They can open a custodial account, but to have a debit card in their own name, they often have to be at least 13 years old. Still, some banks offer cards to children under 13 in the adult's name. Children can get prepaid debit cards at almost any age.
Debit cards are often provided when you open an account at a bank, credit union, or financial institution, but there might be some cases in which you have to request one yourself. You may also follow some of the same options if you need to request a replacement for a damaged or lost debit card. Before committing to opening a bank account and getting a debit card, be sure to consider the monthly service fees that may apply to your savings or checking account.
Once you have an eligible bank account, you may be able to get a debit card through the following steps:. You may open a bank account through some of the following steps:. Please review its terms, privacy and security policies to see how they apply to you. Skip to main content Please update your browser. Please update your browser. Credit Cards. Checking Accounts. Savings Accounts. Home Equity. Downsides: Not part of any ATM network; maximum monthly fee is higher than average; no mobile check deposit feature.
Greenlight stands out for a feature that other prepaid cards lack: store-specific spending controls. The prepaid card also offers real-time activity alerts, free card-to-card transfers for allowances and the ability to remotely lock lost cards.
A Greenlight account can have up to five subaccounts, so it works for a family. Reload methods: Direct deposit, debit card transfer, bank transfer. Other services: Up to 5 subaccounts, no international ATM withdrawal fee. The app, which gets decent ratings, is required to get fee-free cash reloads at Walmart stores. Walmart MoneyCenters and Customer Service desks also offer fee-free cash withdrawals.
This prepaid, reloadable card is family-friendly. You can order an account for free for up to four additional people who are at least 13 years old. Downsides: Fee to use ATMs; limited methods for reloading funds. The difference between prepaid debit cards and checking accounts is starting to blur, as many have similar features and services. Mobile-optimized banking accounts fit in this middle ground — like most prepaid debit cards, many have no credit check; unlike prepaid cards, many are linked to a bank account.
Through the app, though, you can request that checks be mailed to a recipient, even yourself, for free. You can also open a linked Chime savings account and set up automatic transfers.
General fees and features: No monthly fee and no costs for activation or inactivity; no credit check. Cash withdrawal and third-party fees may apply. Purchases: No additional charge. Other services: Optional savings account. Chime has two automatic savings programs: one where a percentage of every paycheck automatically goes into the savings account and the other where your purchases are rounded up to the nearest dollar and the rounded-up change goes to savings see below for more information from Chime.
You can also receive instant transaction alerts and lock your debit card if you lose it. Note that a Chime Spending Account is required to open a savings account. Downsides: The out-of-network ATM fee. Chime says: "Round Ups automatically round up debit card purchases to the nearest dollar and transfers the round up from your Chime Spending Account to into your savings account.
Monthly fee. We looked at 40 reloadable prepaid debit cards offered by some of the biggest banks, credit unions and prepaid debit card issuers. Where multiple card plans existed, only the basic monthly fee plan was considered. We analyzed four categories for each card: general fees and features, purchases and withdrawals, reload fees and options, and other services such as bill pay and savings accounts.
The cards that made this list had the best combination of these categories. Some cards in this roundup have nonbank program managers that partner with banks. No cards above have overdraft fees. We also looked at three alternative, or non-traditional, accounts from financial institutions: Chime , GoBank , Moven.
What the ratings mean:. What are prepaid debit cards? Prepaid debit cards vs. Nerdy tip: If you need to build credit or have been denied a bank account, a prepaid debit card might not be the best option: Secured credit cards help build credit , and if you can't get a regular checking account, try second chance checking.
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