A debit card is a type of payment card that you can use to both make purchases and use to access your money at an ATM. These cards draw directly from your chequing account, making them distinct from credit cards.
We'll go over all you need to know about debit cards in the short article below.
Key Takeaways
- A debit card is type of card that has access to your chequing account.
- Debit cards can be used at ATMs and to make purchases.
- Some debit cards (Visa debit and debit Mastercard) can make payments online as well.
- Debit cards differ from credit cards in that they draw directly from your chequing account as opposed to borrowing money from an issuer.
What is a debit card and how does it work?
A debit card is a payment card that uses funds directly from your bank account. It’s the most popular type of payment card and is usually what you get when you open an account with your bank. Debit cards are also known as bank cards or cheque cards.
Debit cards work with automated teller machines, allowing you to withdraw cash. And, like a credit card, you can use your debit card to make purchases.
Whatever you use it for, the capability of your debit card will depend on how much you have in your bank account and your card’s daily spending limit.
Features and fees of debit card
Here's a rundown of debit card features and fees:
| Debit card feature | Description |
|---|---|
| Transaction fees | These are relatively small charges that occur when you complete a debit card transaction. |
| Daily limits | This is the maximum daily amount you can spend using your debit card. You can increase or decrease your limit. |
| PIN | This is the 4-digit code you enter before making any transaction with your debit card. |
| Security code or CVV number | This is a 3 or 4-digit code at the back of your debit card. It’s needed when making online payments with your debit cards. |
| Card number | This is the 16-digit number on the front of your debit card. The number links to your bank account and personal details. |
| Expiry date | This is the date after which you can no longer use your debit card. It’s usually 3 to 4 years after the issue date. |
| Contactless symbol | This means your card supports contactless technology, enabling you to hover or tap your card over a terminal to make a payment. |
Earning rewards with your debit card
Another less-common feature of some debit cards is the ability to earn points or rewards when you make a purchase using your card. A handful of cards offer this option and it's a unique perk to look for when shopping around for rewards chequing accounts.
A superb example is the Scotiabank Preferred Package, where you can earn 1 Scene+ point for every $5 spent on daily purchases and 1 point for every dollar you spend at Cineplex.
Learn more here:
There's not much better than unlimited free transactions, but the Scotiabank Preferred Package comes packed with even more perks to seal the deal. These include a bonus interest rate on the top Scotiabank savings account, a first year annual fee waiver on select cards, and points on every day purchases with the Scene+™ program.
- Kickstart your account with a $50 GeniusCash bonus
- Get a welcome bonus worth up to $700 (ends October 30, 2025)
- Unlimited debit transactions and Interac e-Transfers
- Ability to waive monthly fee with a minimum balance of $4,000
- Earn Scene+ points on your debit transactions
- First year annual fee waiver on select Scotiabank credit cards
- Age of majority
- Canadian citizen
$50 GeniusCash + Get up to a $700* welcome bonus + Earn Scene+ points on all debit purchases.- First year annual fee waiver (up to $150) on select credit cards
- Earn Scene+ points on debit transactions
- Earn an additional 0.05% on your Momentum Plus Savings Account
$50 GeniusCash + Get up to a $700* welcome bonus + Earn Scene+ points on all debit purchases.
How to use a debit card
Debit cards can either be used to access an ATM or pay for purchases.
Simply insert your card into an ATM and enter the PIN. This will allow you to withdraw and deposit money.
When making a purchase, you can tap, insert, or swipe your card. It will function like a credit card. If your card is a Visa debit card or a debit Mastercard, it will also be accepted online by any vendor that takes Visa or Mastercard, respectively.
How to protect your debit card PIN
Because a debit card has access to what's in your bank, it's important to protect your PIN to avoid fraud. Here are some tips:
- Don't settle for a weak PIN like 1-2-3-4 or 1-1-1-1 – choose something that you can remember, but cannot easily be guessed
- Don't have your PIN written down anywhere in your wallet or phone
- Cover the keypad every time your enter the PIN
- Wipe all the numbers with your fingers after entering your PIN to prevent heat-sensing technology from capturing the sequence
- Check the payment terminal or credit card slot for tampering – give it a wiggle to ensure there is no credit card skimmer placed sneakily on top
- Change your PIN every year
If you suspect any unauthorized activity, contact your bank immediately.
Using your debit card without a PIN
With contactless payments becoming ubiquitous in Canada, you can generally just tap your card on a POS system to make a payment. Look for the symbol on both your card and the payment system.
If your transaction exceeds a set limit (usually $250), you may be required to use chip-and-PIN instead.
Credit card vs. debit card
Credit cards and debit cards differ based on where the money you spend comes from.
- Debit card: The money is taken directly from your bank account (you spend your own money).
- Credit card: The cost is added to your available credit (you spend money you borrow from the card issuer).
Since you can only spend as much as you have in your chequing account, using a debit card reduces the likelihood of overspending.
In addition, debit cards provide the same ease of use as credit cards without borrowing money or incurring interest or fees. As a result, a debit card is an ideal way to keep track of your spending and save money.
What is a Visa debit card?
A Visa debit card is not much different from other debit cards. The main difference is the payment network it uses – Visa. Your bank can issue you a debit card with Visa as the payment network or another, like Mastercard.
However, Visa debit cards are popular as they can be used to process online, phone, and international transactions.
What is a debit Mastercard?
Mastercard operates something similar on debit cards, as well. If the online merchant you're shopping with accepts Mastercard, you'll be able to use your debit card to make the purchase.
FAQ
What is the security code on a debit card?
The security code on a debit card, usually found at the back, is the card verification value (CVV) or card verification code (CVC). It’s a 3 or 4-digit number you need to authenticate the card, especially when making online payments.
What is a contactless debit card?
A contactless debit card is simply a debit card that supports contactless technology. These debit cards allow close-range transactions without slotting them into any card reader or POS machine.
What is a hold on a debit card?
A hold on your debit card reduces your bank account balance. It’s like a freeze, typically due to pre-authorization when making payments. You’ll be unable to use the amount on hold until it’s been cleared.
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