What Is a Check Card?

• A check card, or debit card, is a payment card that is linked to your checking account.
• Unlike a credit card, it is not a form of borrowing money. The funds for the purchase come directly out of your checking account.
• You can use a check card to make a purchase (in person or online) or to withdraw cash (from a bank or ATM).
• Many businesses no longer accept paper checks, but most will accept check cards.

Definition and Example of a Check Card

A check card, or debit card, is a card that is coupled with your checking account. When you use it to make a purchase, the money for your transaction is drawn from your bank account. A check card is like a plastic version of a check, but it is more convenient to use, because it is more widely accepted. Many stores will not take paper checks, but most will take check cards.

Check cards are a popular option for people who want to pay with a card but either can’t get or don’t want to use a credit card. Unlike a credit card, it is not a form of borrowing money. You do not have to pay a bill or interest on your purchases.1 You also do not build credit with a check card, because you are not borrowing anything in order to use it.2

• Alternate name: Debit card

You can use your check card to buy things or pay bills. For instance, you may be able to use your check card to pay your power bill online or pay a medical bill. You can also use it when you buy something either online or in person. In all of these instances, the money will be taken out of your checking account.

How Check Cards Work

How you use your check card will depend on whether you are making a purchase in person, either as a “debit” or “credit” transaction, or online. You can also use a check card to withdraw cash from your checking account.

Making a Payment in Person

When you use your check card in person, you’ll be asked to swipe it through a card reader. If your check card has a chip, you will need to insert it into the chip reader slot. Some card readers also work by merely tapping the machine with your card. You will be prompted to enter your personal identification number (PIN), which is usually a four-digit number that you have selected.

Once the transaction is processed, the payment is withdrawn immediately from your checking account.

Using the “Credit” Option With Your Check Card

Check card payments can often be processed as either “debit” or “credit” transactions. Some businesses will simply process every card as a credit transaction. Other times, you may be asked whether you’d prefer a credit or debit transaction.

For a credit transaction, you will be asked to swipe or insert your card as usual, but you will need to sign a receipt rather than entering your PIN.

Even if your payment is processed as a credit transaction, the funds are still debited directly from your checking account.

Making a Payment Online

You can use your check card to make a payment online or over the phone. When prompted, you will need to either say or enter the information associated with your check card. This usually includes:

• The name on the card
• The card number
• The expiration date
• The ZIP code associated with your checking account

Sometimes you may also need to provide the type of card (e.g., Visa, MasterCard) and the card’s security code.

The security code, sometimes called a “CVV code” or “CID (card identification) number,” is different from your PIN. On most check cards, the security code is a three-digit number printed on the signature panel on the back of the card. Some cards, like American Express, have a four-digit security code printed on the front of the card,above the main card number.3

Using Your Check Card to Get Cash

You can also use your check card to withdraw cash from your checking account at a bank or ATM.

You can withdraw cash using your check card at a branch of the bank where your checking account is located. Give your check card to a teller, and tell them how much you want to withdraw. They will either process the transaction for you or ask you to use a card reader to enter your information.

To withdraw cash from an ATM, insert your check card into the designated slot, and follow the prompts on the screen to select how much you want to withdraw.

With most check cards, you can withdraw cash from any ATM. However, depending on the terms of your checking account, you may be charged a fee to use an ATM at a bank where you are not a member.

Do I Need a Check Card?

Not everyone needs a check card, but they are good to have if you have a checking account. Check cards allow you to:

• Easily access the funds in your checking account
• Withdraw cash when you need it
• Make payments online
• Avoid carrying large amounts of cash

Check cards are a good alternative to using personal checks. Many businesses no longer accept paper checks, but most will accept check cards.

Businesses that don’t take check cards are the same ones that won’t take credit cards either. Most commonly, these places are cash-only establishments and seek to avoid the fees that merchants must pay to use debit and credit cards.

Alternatives to Check Cards

If you don’t have (or don’t want to use) a check card, there are other forms of payment available:

• Cash: Most businesses will accept cash payments for all transactions. For large purchases, however, carrying around sufficient cash may not be very secure. Your bank will not replace any cash that you lose, while it is possible to recover funds from a lost or stolen check card.
• Personal check: Most banks offer paper checks for checking accounts, though you may have to make a point of ordering them if they are not provided automatically. Some businesses may not accept personal checks or may require identification, such as a driver’s license, if you want to use one.
• Credit card: Credit cards can be used in most places where you would use a check card. They offer may of the same benefits, including allowing you to make large purchases easily. Some can also earn you rewards as you use them. However, credit cards come with high interest rates. It can be easy to charge more than you can actually afford, leading to credit card debt.
• Prepaid debit card: If you don’t have a bank account, you still may need a card for making payments online or over the phone. A prepaid debit card can be purchased with cash at most drugstores or grocery stores, and then registered to your name and address by calling the card’s customer service number. You can choose the value that you want on the card at the time you purchase it, and many cards will allow you to reload funds.5 Some prepaid cards even allow you to use direct deposit to reload from your paycheck.

Check Cards vs. Debit Cards

A check card and a debit card both refer to a payment card that draws money from a checking account to pay for transactions. These cards are more commonly referred to as “debit cards.”

The term “check card” is also used by some companies as part of branded debit card names, such as the Visa Check Card. Branded check or debit cards may have unique features or limitations that are outlined in their card agreements.67

Pros and Cons of Check Cards

Pros Explained

• No interest payments: Unlike a credit card, you aren’t borrowing money to make a purchase. A check card pulls money directly from your checking account, so you won’t be charged interest.1
• Can be used as a debit or credit card: If you’re worried about your PIN being stolen, you can use your check card with the credit option. This allows you to sign, rather than entering your PIN in a public place.
• No approval process: With most banks, there is no separate approval process to get a card once you have a checking account. Many banks will send you one automatically, or you can request that one be mailed to you.1

Cons Explained

• Risk of theft from checking account: If your check card is stolen and used, the thief is taking money directly from your checking account. It may take a long time to get the money replaced while you file a police report and dispute the charges.
• Merchants may put a hold on funds: Hotels, car rental companies, gas stations, and other companies may place a hold on your account when you use your debit card to make a purchase. For example, if you pay for a $95 hotel room, the company may place a $200 hold on your account until the transaction is processed by your bank. That could tie up funds you need for other purchases or lead you to overdraw your account if you don’t know about the hold.