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A debit card -- sometimes called a cash plus card -- allows you to make point-of-sale (POS) purchases by swiping the card through the same type of machine you use to make credit card purchases.
Sometimes you authorize a debit card transaction with your personal identification number (PIN). Other times, you sign a receipt just as you would if you were charging the purchase to your credit card. You can also use the card to make ATM withdrawals.
When you use a debit card, the amount of your purchase is debited, or subtracted, from your account at the time of the transaction and transferred electronically to the seller's account.
You have some of the same protections against loss with a debit card as you do with a credit card, but there is one important difference. While $50 is the most you can ever be responsible for if your credit card is lost or stolen, you could lose much more with a lost or stolen debit card if you don't report what has happened within two days of discovering it.
If you delay reporting a missing card, you could lose up to $500. And if you wait more than 60 days after receiving a bank statement that includes a fraudulent use of your card, you could lose everything in your account including your overdraft line of credit. You can find the specific rules on the Federal Trade Commission website at www.ftc.gov.
In addition, if you purchase defective merchandise with a debit card, there are no refunds. Most credit card issuers do not, generally speaking, make you pay for defective products.