Debit cards are a type of credit card where there is no monthly settlement with the checking account. All payments are debited directly. Debit cards thus enable secure participation in cashless payment transactions and convenient cash withdrawals from ATMs. When a payment is made or cash is withdrawn, the respective account is “debited,” i.e., charged. When the debit card is used for a transaction, the cardholder’s account is then debited directly for the specific amount and not during the end of a billing period. Once the balance of the associated account is empty or reaches an overdraft limit, we can no longer use the debit card to make payments.
Debit cards – credit-based credit cards
Unlike conventional credit cards, debit cards are credit-based. While the owner of a credit card can, for example, balance the amount spent once a month, the debit card is debited directly from the owner’s checking account while it is used. While this limits the payment scope to a certain extent, it also leads to better control and security. Thus, debit card holders benefit from the flexibility of the credit card function without the risk of any surprise at the end of the billing period.
Debit cards – security in payment transactions
In a legal sense, debit cards are so-called payment cards within Section 152 a (4) of the German Criminal Code (StGB). The misuse of a debit card is thus punishable by law. To prevent misuse of the card, the user must authenticate himself or herself by entering a PIN or signing a document when using the card. In Germany, all debit cards contain a recognition code that can be more effective than a simple magnetic stripe in protecting against fraud. This so-called MM feature (modulated feature) is almost impossible for fraudsters to imitate, making it difficult to create a duplicate card. However, the MM feature is not read everywhere – abroad, fraudsters can therefore still sometimes carry out illegal transactions with duplicates.
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