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What are debit cards and how do they work?

A debit card is a type of banking card that is typically connected to a checking account held at a credit union, bank, or other financial institution.

A debit card is convenient to have because it provides you with access to your money at ATMs across the U.S. and around the world.
The difference between a debit card and a credit card is that all purchases made with a debit card will immediately withdraw the funds from the checking account the card is connected to. All purchases made with a credit card are charged to the credit card account and a monthly bill statement is sent to the consumer.
At Credit Union of Southern California (CU SoCal), we make opening a checking account easy!
Call 866.287.6225 today to schedule a no-obligation consultation and learn about our mortgages, home equity lines of credit, auto loans, personal loans, checking and savings accounts, and other banking products. As a full-service financial institution, we look forward to helping you with all your banking needs.

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How to get a debit card

It’s easy to get a debit card and many financial institutions let you apply for a debit card online.
Here are the basic steps for getting a debit card:
Open a checking account. Because debit cards are connected to a checking account, you’ll need to open an account at the credit union or bank of your choice. After you are approved for the checking account you will be offered a debit card for your account. The debit card is usually sent by mail and arrives at your home within two weeks of opening your checking account. It’s possible to open a checking account in-person or you can open a checking account online.
Get a prepaid debit card. If you cannot open a checking account due to bad credit or other factors, you may purchase a prepaid debit card. According to the Consumer Financial Protection Bureau, when you shop for a prepaid card, compare the features and fees among different cards to find the one that will work best for you.
You can buy a prepaid card online or in person at a retail store. When you buy a prepaid card, be sure to register it for protection in case your card or funds are lost or stolen. Make sure the prepaid card can be used at the locations where you plan to use the card.
Prepaid cards that feature a major network brand (like Visa, MasterCard, American Express, or Discover) can be used at any location that accepts that network brand. Other types of cards may have limitations on where or how they can be used, such as only at ATMs or at specific kinds of stores.

Debit card pros and cons

As with all financial products there are pros and cons to be aware of. Always do your research and speak to several financial institutions to determine which option is best for you.


  1. Prevent credit card debt. Because debit cards withdraw money from your checking account you won’t accrue high-interest credit card debt.
  2. Convenient. Debit cards can be used at ATMs in the U.S. and abroad, and for purchases in stores and online.
  3. No annual fee. When connected to a classic or traditional checking account, there is no fee to have a debit card, even if you don’t use it.


  1. Overdraft fees. These are fees the financial institution charges if a purchase is made for more money than is in the checking account.
  2. Not feasible for expensive purchases. A debit card can only be used to make purchases that you have enough cash in your checking account to cover. For example, most people don’t keep enough money in their checking account to purchase a car.
  3. High risk of theft. If your wallet and debit card is lost or stolen your card could be used and your checking account emptied through unauthorized purchases. A thief could also access your checking account. Never keep your debit card PIN number in your wallet with your card.

How do debit cards compare to credit cards and prepaid debit cards?

Each type of card was created to provide consumers with different features and benefits. Here’s how they compare:
Debit card vs. credit card. A debit card is like using cash and the money comes out of your checking account immediately. A credit card purchase is billed afterward.
Debit card vs. prepaid card. A debit card can be used at an ATM, online, and in-store purchases, and the money comes out of your checking account.

A prepaid card contains only the amount of money you paid for it (less any fees) and cannot be used at an ATM.

Debit card vs. ATM card. A debit card can be used in stores at the register, to make online purchases, and at ATMs. An ATM card can only be used at an ATM.

Debit card fees

Many debit cards have fees associated with their use. Here are some of the most common fees to be aware of:
Out-of-network fee. This fee is charged if you use an ATM that is not in your bank’s approved network.
Foreign transaction fee. This fee is charged if you use your debit card to make purchases in foreign countries. This includes use of an ATM, and additional ATM charges may apply.
Replacement fee. Some financial institutions charge a fee if the card is lost or stolen and needs to be replaced.
Overdraft fee. If you use your card to make a purchase and there aren’t sufficient funds in your checking account to cover the charge an overdraft fee will likely be charged on your account. Some financial institutions provide overdraft protection options, so you don’t have to pay a penalty.
Monthly fee. Some debit cards that are connected to rewards checking accounts come with a monthly fee.

Can you use a debit card online?

Debit cards can be used to make online purchases. This is one of the ways that debit cards are like credit cards. As we mentioned earlier, a credit card purchase will be posted to your account and a billing statement will be sent to you for payment later that month. A debit card purchase will debit your checking account immediately or within several hours.
If you do not have sufficient funds in your checking account to pay for the purchase the charge may be declined, and your financial institution may charge you an “insufficient funds fee.” Depending on how your checking account is set up you may have “overdraft protection.” For example, CU SoCal overdraft protection will transfer funds from your savings, money market, or line of credit when you don't have money available in your checking account to cover a check or debit transaction.

What to do if your debit card is stolen

If your debit card is stolen, you should report it to your financial institution immediately so the card can be deactivated. A new card will be issued to you with a new number.
If your debit card is lost outside of your home, you may request that the card be deactivated. If you think your card is misplaced in your home or car, you can call the financial institution to ask that the card be temporarily frozen to prevent charges from going through. Using your financial institution’s mobile app or online banking platform you can freeze the card yourself and unfreeze the debit card when you find it.

Why savvy consumers choose CU SoCal

For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.

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Credit Union of Southern California (CU SoCal) is a leading financial institution empowering those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County to reach their goals and build strong financial futures. CU SoCal provides access to convenient money management services and offers competitive rates and flexible terms on auto loans, mortgages, and VISA credit cards—turning wishing and waiting into achieving and doing.


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