Sascha Hutchinson (Banking Expert) gives expert video advice on: What is a debit card?; How do I use a debit card?; When should I use a credit card? and more...
What is a debit card?
A debit card is a particular type of card that you're issued with when you open a current account. A debit card is attached specifically to your account and you can use it to withdraw money from an ATM, or to purchase things at the till in shops.
What is Chip and PIN?
Chip and PIN is a secure way of using your debit or credit card to purchase things in shops. You'll get your card, you'll put in in the machine in the store and enter your PIN number. The money will come out of your account if you're using a debit card, or put onto your credit card when you buy those goods.
What is a PIN number?
PIN stands for "Personal Identification Number." It's a number that you are issued with when you open your current account and are given a debit card or a credit card. A PIN is a number that's attached specifically to that card, and you'll need to use it whenever you use that card, at an ATM or in a shop.
What happens if I forget my PIN?
If you forget your PIN, you need to contact your bank to arrange to be issued with a new one. You'll go through various security procedures, so that they ensure that they're speaking to the right person. Then they will send you a new PIN, probably in the post.
When should I use a debit card?
You can use your debit card to purchase things in shops or to withdraw money from an ATM. Your debit card can be used as long as you have money in your account and you're not in any danger of breaching your agreed overdraft limit with your bank.
What is a credit card?
When you buy goods on a credit card, you're actually spending someone else's money. You're borrowing money to buy those goods. You use the credit card in exactly the same way as a debit card, except that instead of money coming out of your current account, you're building up a debt that you'll eventually have to pay off. The goods that you buy on a credit card will cost you more, because you have to pay interest on that money that you've borrowed.
When should I use a credit card?
You can use a credit card when you don't immediately have the cash available. If you need to borrow money until your next payday, you can use a credit card, or it can be used for a big purchase that's going to take you several months to pay off.
How many credit cards am I allowed to have?
Theoretically, you can have as many credit cards as you want. You'd be very sensible to limit yourself to one credit card to ensure that you don't get yourself into too much personal debt that you can't pay back.
Will I ever have to sign when shopping with a credit or debit card?
It's quite rare to have to sign for using a credit or debit card now that Chip and PIN has been brought in. However, some smaller shops don't have Chip and PIN facilities, so you may still need to sign. Just make sure that when you do, your signature matches the signature on the back of the card.