A Complete Guide to Debit Cards

In the 21st century it’s increasingly difficult to use cash as legal tender, making a debit or credit card an essential, everyday necessity for many.

Our cashless society was further exacerbated by Covid-19 restrictions resulting in thousands of businesses refusing to accept cash payments.

And, according to a Which? survey, even though most restrictions have now been lifted, 1 in 5 customers are still being told they can’t pay in cash and Martin Lewis has stated that shops are legally entitled to refuse cash, as long as this refusal isn’t discriminatory.

So, if you’ve recently found yourself forced to use a debit card for the first time, have just opened your first bank account or wonder if it’s better or safer to use a debit or credit card, here’s everything you need to know about debit cards.

Contents:

What is a debit card and how does it work?

How old do you have to be to get a debit card?

Do I need a good credit score to get a debit card?

Does my debit card affect my credit score?

Does opening a debit card affect credit?

What is an issue number on a debit card?

How much can you spend on a debit card?

Do debit cards have limits?

Why has my debit card been declined when I have money in it?

Why is my debit card not working for online purchases?

Is it safe to use a debit card online?

Are debit cards protected?

Can I have more than one debit card?

The benefits of having a debit card vs the disadvantages of having a debit card

What is a debit card and how does it work?

To be able to use a debit card you need to have a current account and the word ‘debit’ effectively means you are deducting money from your bank account balance and paying with cash, except no money changes hands and the transaction is electronic.

Carrying a debit card is much safer than carrying cash and cards are easy to cancel if they’re lost or stolen.

The most common types of debit cards are the visa debit and mastercard debit brands.

You can use a debit card to:

• Pay for goods or services in person, over the telephone or online
• Withdraw cash from most cashpoints, in the UK and overseas
• Make contactless payments up to £45 in most UK retail stores
• Access online banking with a PINsentry device on a computer

Paying for goods

When you use a debit card to pay for purchases in person, if the amount is more than £45 (soon to be £100) meaning you can’t pay by Contactless, you will need to insert your card into the chip and PIN* device with the gold chip end first with the chip facing upwards.

You then enter your four digit PIN code that would have been sent to you in the post, separately to your card, when you first opened your current account.

If you find the PIN code difficult to remember, you can always change it at a cashpoint machine.

Paying online or over the telephone

If you pay for goods over the telephone or online, instead of entering your PIN code you will need to supply the last three digits of your ‘CVV’** number shown on or near the signature strip on the reverse of your debit card. (This can be an issue number, depending on your card type.)

NOTE: You must NEVER keep a note of your pin in your purse, wallet or bag so make sure it’s something you can easily remember like a special date or memorable year but DO NOT use your own date of birth.

*   Personal Identification Number

** Card Verification Value

Cash withdrawals

When you use a debit card to withdraw cash from a cashpoint, again, you will need to enter your four digital PIN code after inserting your card (gold chip end first with the chip facing upwards).

You will then be asked to select the service you wish to use (cash withdrawal) and select the amount of money you wish to withdraw - you can choose from preset amounts or choose to type in your own amount.

You then press enter (or a green ‘OK’ button) and you should then receive your cash and card back or an [optional] receipt.

There is usually a daily maximum limit on the amount of cash you can withdraw from a cashpoint machine which is typically £500 (or, if with some banks like Barclays, £300 unless you extend your daily limit to £500).

Contactless technology

Most debit cards now include contactless technology enabling you to simply tap or hover your card, face down/signature strip up, above the screen on a card machine, instead of having to insert your card and enter your pin.

The contactless limit is currently £45 with most retailers and this is set to increase to £100 in the UK on 15th October 2021.

Online banking

If you opt for online banking, most current account providers will provide you with a small ‘PINsentry’ device that looks like a calculator. You will very often need to use a PINsentry device when you make a payment to someone new for the first time or to log in to online banking on a PC.

Read: What is the difference between a credit card and debit card?

How old do you have to be to get a debit card?

• Prepaid debit cards: Parents can arrange for their child to have a prepaid debit card from the age of 6 years old.
• Children’s debit cards: Children can independently have their own bank account and debit card from the age of 11.

For more details about prepaid debit cards and children’s bank accounts, check out Martin Lewis’s top picks.

You might be interested in: Are Junior Savings Accounts worth it?

Do I need a good credit score to get a debit card?

No, if you have a poor credit score or history then you can get a debit card with a basic bank account with no overdraft facility.

If you want an overdraft facility, you will need a good credit score and history.

Read more: How can an overdraft affect your credit score?

Does my debit card affect my credit score?

No, using a debit card shouldn’t affect your credit score as you are using it to spend your own money and are not borrowing any credit, unless you use an overdraft facility.

Using an overdraft facility does show up on your credit report but shouldn’t harm your score, unless it’s unauthorised.

Read more: 14 reasons why your credit score is important

Does opening a debit card affect credit?

You can open a basic current account with no overdraft and this will not affect your credit score at all.

However, if you apply for a current account with an overdraft facility then credit checks will be made, although these shouldn’t affect your ability to get credit unless you already have a poor credit history or make a few applications in quick succession.

Read: What is an Overdraft?

What is an issue number on a debit card?

An issue number on a debit card is effectively the same as a CVV number, except it’s a four-digit number located on the front of a card instead of the reverse.

How much can you spend on a debit card?

You can spend as much money as you hold in your current account and, if you have one, up to the limit of any overdraft facility.

You might like to read: What is a packaged bank account?

Do debit cards have limits?

Whilst many accounts have no limit (the only ‘limit’ being how much money you have), if you make an expensive purchase costing thousands of pounds your bank will very often contact you by telephone to verify the payment is genuinely yours.

Most online banking apps allow you to choose and set your own spending limit on a single card transaction to prevent fraud.

Why has my debit card been declined when I have money in it?

There are numerous reasons why your debit card has been declined such as:

• You entered an incorrect PIN too many times (usually 3 attempts will lock you out)
• You’ve reached your transaction limit
• You don’t have sufficient funds
• Your particular debit card isn’t accepted by a certain vendor
• Your card has expired
• Your card has been blocked by your bank due to suspected fraudulent activity
• Your card is damaged and needs replacing
• Your card hasn’t been properly activated

Why is my debit card not working for online purchases?

It will usually be for any one of the above reasons given under ‘Why has my debit card been declined when I have money in it?’

Is it safe to use a debit card online?

If a site is reputable and has a lock symbol to the left of their url indicating you have a ‘secure connection’ then it is generally safe to use a debit card online. However, using a credit card is generally safer because it offers more protection on purchases.

Are debit cards protected?

Debit card purchases are not protected by Section 75 of the Consumer Credit Act (unlike credit cards) but you might be able to make a refund claim under the ‘chargeback’ scheme’.

Unauthorised payments on a debit card will usually be refunded by your bank.

You might like to read: Credit card protection - Applying Section 75 of the Consumer Credit Act

Can I have more than one debit card?

Yes, you can have multiple current accounts and debit cards.

The benefits of having a debit card vs the disadvantages of having a debit card

You might like to read: Should I switch banks? The pros and cons of switching