Using and paying with debit cards

A debit card is the first payment choice for a lot of people who don’t like to pay on credit. You can take out cash at cash machines, use your card at the till or pay online and by phone.

How does a debit card work?

According to the FCA, you are 24% less likely to incur unarranged overdraft charges if you use a mobile banking app and text alert service.

When paying by debit card, the money comes directly out of your bank account. It’s the same as withdrawing cash and handing it over – but safer because there’s a bit of fraud protection and the card is easy to cancel if it’s lost or stolen.

When you use your card in a cash machine or most shops you will be asked to type in your PIN code, unless you’re using contactless to pay.

Types of debit card

There are three types of debit card:

  • Visa Debit – the most common
  • MasterCard Debit
  • Maestro Debit

All three debit cards are much the same, with a few small differences.

With a Maestro or Visa Debit card, you might be able to pay for something even if you don’t have the money in your account – but you’ll go into debt and you’ll have to pay charges. You can chose to turn off this function.

The pros of a debit card

  • Easy to carry. One little card, compared to a whole wad of cash.
  • Accepted almost everywhere in the UK and in many places around the world.
  • Safer than cash. If they’re lost or stolen you can cancel them quickly, and you shouldn’t lose out.
  • Get cash from cashpoints, usually with no charge. Some cashpoints will charge you, but they’ll tell you so on-screen before you decide to go ahead.
  • Up to £50 cashback at the supermarket checkout, or other places that offer cashback services (for Visa Debit, MasterCard Debit and Maestro only).
  • Shop by phone, mail order or online, as well as on the high street.

The cons of a debit card

  • No borrowing allowed. As you’d expect, you can’t pay on credit with a debit card. You need to have the money ready in your account, or to have agreed an overdraft with your bank.
  • Accidental overdrafts cost money. If you have a Maestro or Visa Debit card you might be able to go over your overdraft limit accidentally, which means you’ll be hit with charges.
  • Less protection than a credit card. You can’t be sure you’ll get your money back for faulty goods, but some debit card providers offer a Chargeback scheme where they may be able to recover some or all of your money for you after looking into it.

Charges and fees on debit cards

Overdrafts on debit cards

If you go overdrawn then you’ll probably have to pay fees and interest charges. Find out more about how to keep your costs down.

Find out more about how to keep your costs down in [Overdrafts explained.


Cash withdrawals when using a debit card

  • Most cash machines won’t charge you to use a debit card. Those that do will tell you on-screen and give you the chance to cancel your transaction if you want to.
  • If you use a cash machine abroad there may be fees to pay. Check with your bank before you go. If the fees are too high you might want to get a special card to use on your travels.
Save on your holiday spending with our guide to Cheap cards to use abroad.

Contactless payments

Some debit cards let you to pay up to £30 by holding your card to a card reader without having to enter your PIN. This is known as contactless technology, although different companies refer to it by different names. For example, ‘payWave’ by Visa and ‘PayPass’ by Mastercard.

There is a special sign to indicate where you can pay in this way and your card will have a similar symbol on it. If your debit card does not have this feature, you might be able to request one which does from your bank.

You can find more information from the UK Cards Association website.

Contactless security

If you’re careful about how you use your contactless payment feature, then the process is generally regarded as safe.

However, the technology itself is not without risks and there are a few things you can do to keep your money safe.

Find out more about contactless safety the Get Safe Online website.