Definition
A debit card is a tool for buying goods and services in which the cardholder accesses a cash balance from a depository account.
Analysis
Debit cards have gained much popularity beginning in the late 1990s. Many consumers prefer to avoid getting in over their head in credit card debt, and simply use the money they have for purchases.
There are three main reasons why debit cards have become so popular:
- Debit card issuers enabled cardholders to use them whereever credit cards were used
- Debit card issuers extended many fraud protections afforded to credit card users
- Consumers may also get cash withdrawals at the time of purchase from many venders
Debit cards have allowed for greater flexibility with consumer spending, while providing a convenient alternative to credit cards. In most cases, a debit card doubles as a consumers ATM card, allowing for even greater convenience.
