Debit cards are a convenient way to pay for the things you need. But with so many different types of debit cards available, it can be hard to figure out which one is right. We explain the different types of debit cards and help you choose the one that's best for your child.
Related: What age can you get a debit card?
What is a debit card?
A debit card is a plastic card that gives you access to your bank account funds. Debit cards can be used to withdraw cash, make purchases, or pay bills.
When you use a debit card, the money is deducted from the account balance immediately. Debit cards are similar to credit cards, but there is no loan involved. The cardholder spends only what is available in their account unless they have arranged for an overdraft.
Debit cards are part of the electronic payments system and can be used for point-of-sale purchases, ATM withdrawals, and online shopping. Many banks and financial institutions offer debit cards to their customers as an alternative to cash or checks. Some businesses also offer debit cards to their employees as a way to access their earned wages.
How do debit cards work?
Debit cards work by linking your bank account to the card. When you use it, the money is transferred from your bank account to the merchant's account.
Debit cards can be used anywhere credit cards are accepted and they usually have a Visa or MasterCard logo on them. When making a purchase, the cardholder enters their PIN (Personal Identification Number) into a keypad, authorising the transaction. Some debit cards now have contactless technology, which allows the cardholder to tap their card on a reader to pay for purchases. Most debit cards also have ATM access, so you can withdraw cash from your account at any time.
Different types of debit card
There are different types of debit cards, each with its own set of features and benefits. Here are some of the most common types of debit cards:
Standard debit card
The most basic type of debit card. It can be used to withdraw cash, make purchases, or pay bills. Most standard debit cards have a limited daily spending limit and can be used at most ATM machines and retailers.
Pros:
- Can be used anywhere that accepts major credit cards
- No need to carry cash
- Can track spending easily
Cons:
- May have fees for certain transactions, such as international transactions or ATM withdrawals
- May have a limit on the amount of money that can be spent in a day
Prepaid debit card
This is a type of debit card that needs to be loaded with funds before it can be used. They can be used to make purchases or withdraw cash, but cannot be used to overdraft your account. Prepaid debit cards are typically not linked to a bank account and do not offer features such as rewards or credit. You can learn more about prepaid debit cards by reading our blog on how prepaid debit cards work.
Related: Should you get a prepaid card for your kids?
Pros:
- Can be used anywhere that accepts major credit cards
- No need to carry cash
- Can track spending easily
- Can be reloaded with money as needed
- No risk of overspending
Cons:
- May have a limit on the amount of money that can be spent in a day
- Not typically linked to a bank account
Related: Prepaid debit card vs bank account
ATM card
This is a type of debit card that can be used to withdraw cash from an ATM machine. ATM cards are typically linked to a current account and have a daily spending limit.
Related: Difference between ATM card and debit card
Pros:
- Can be used to withdraw cash from ATMs
- Typically linked to a current account
Cons:
- ATM cards are generally limited to a few hundred pounds per day
- May have fees associated with using them
- Need to carry cash
Related: Cash card vs debit card
Which type of debit card is best for kids?
The type of debit card that is best for kids depends on their needs and spending habits. If your child plans to use the card primarily for cash withdrawals, then an ATM card is a good option. However, if your child plans to use the card primarily for making purchases at retailers and online, then a standard debit card or prepaid debit card would be a better option.
Your child may feel ready to have their own bank account. A prepaid debit card is a safer option to help them manage their spending and ensure they don't overspend. Many parents use prepaid debit cards for kids under 18 as a way to teach them about responsible spending while letting them manage their own finances in a secure, controlled way. That's why the GoHenry kids debit card is such a popular option with parents. Plus, our debit card is available for kids from the age of six, compared with the lowest debit card age that most UK banks offer is 11.
Each type of debit card has its own pros and cons, so be sure to choose the one that's best for your child.
Different debit card issuers
- Visa Debit: The most common type of debit card, which uses the Visa network to process transactions and can be used anywhere that accepts Visa payments.
- Debit Mastercard: A close second to Visa in terms of acceptance, Mastercard also offers a wide range of debit cards.
- Maestro: Operated by Mastercard, Maestro is a debit card service that’s available in 93 countries.
- Visa Electron: A Visa Electron card can be used anywhere that accepts Visa payments. It’s worth noting that not all ATMs or merchants will accept this type of card.
- UnionPay: UnionPay is the largest bank card association in China and can be used to make payments and withdrawals at over 5 million ATMs around the world.
All in all, there are a number of different types of debit cards and providers available, each with its own set of benefits and drawbacks. Be sure to choose the type of debit card that is best for your child’s needs. And if you’re looking for a prepaid debit card for kids, be sure to check out our prepaid debit card.
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