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A debit card works almost like a checkbook: Payment is drawn automatically from your account at the time of the transactions. Your checking account statement includes a list of the month's transactions, but, like check transactions, they are already paid. And because you don't have a bill to pay each month, the debit system is ideal for people who travel for long periods of time.

There are two kinds of debit cards. The first one is "On-line debit cards." This is similar to your ATM card, requires a personal Identification number (pin), and drafts money from your account instantly. " Off-line debit cards" do not need a pin number and it takes two to three days to clear a charge. Some banks charge a $10 to $15 annual fee for off-line cards but not on-line card. Some charge neither. You pay 25 cents to $1.50 per transaction, however, for on-line cards you can use at automatic teller machine, depending on whose machine you use.

Advantages and disadvantages of both

Advantages:

1//There are high interest rates because you can't carry over charges from one month to the next.

2//Some banks charge no annual fee on debit cards. With all-electronic handling, their handling, their costs are less, and they make their money on the fee charged to the merchant.

3//You can leave your checkbook at home, reducing the chance of it being lost or stolen.

4//Checks are seldom accepted out of town, but credit and debit cards are welcome, even internationally.

5//Even supermarkets are accepting credit and debit cards these days, substantially speeding up payment at the cash register.


Disadvantages:

1//Some banks charge an annual fee.

2//It's next to impossible to stop payment on an on-line debit transaction.

3//You must keep track of your expenditures and remember to deduct them from your checkbook balance.

4//Forget "float" you're used to checks (two to three days) and credit cards (as much as a month until the end of the billing cycle).

5// There's the possibility of theft. Never write your PIN on an on-line debit card.