Types of Debit Card

Do you have a debit card?

You may not realize that you have a debit card. Many banks are replacing their standard ATM cards with upgraded ATM cards with a debit feature. You may also receive in the mail what looks like a credit card when in fact it is a debit card.

"On-line" debit cards: These cards usually are enhanced ATM (automated teller machine) cards which work the same as they would in an ATM transaction. It is an immediate electronic transfer of money from your bank account to the merchant's bank account.

To access your account at a store terminal, you must punch in your personal identification number (PIN), as you would at an ATM. The system checks your account to see if it has enough money available to cover the transaction.

"Off-line" debit cards: These cards usually look like a credit card and resemble a credit card transaction. The merchant's terminal reads your card, identifies it as a debit rather than a credit card, and creates a debit against your bank account. However, instead of debiting your account immediately, it stores the debit for processing later -- usually within 2-3 days.

Most, but not all, transactions are verified to see if there are adequate funds. Instead, of using a PIN number, the customer must sign a receipt, as he or she would with a credit card.

The "on-line" and "off-line" distinction may not matter to you unless:

• your financial institution charges transaction or monthly fees.

• you prefer the security of a PIN-required transaction.

• you prefer that both options not be on one card.