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Debit Definition: Understanding the Basics and Its Relationship to Credit

Last updated 04/08/2024 by

SuperMoney Team

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Debit cards are becoming increasingly popular for everyday purchases, but what exactly is a debit and how does it work? Furthermore, we’ll explore the meaning of debit, its relationship to credit, the different types of debit cards, as well as their advantages and disadvantages. We’ll also provide tips on how to use a debit card safely.

What is a debit?

A debit is an accounting term used to describe an entry made on the left side of an account ledger. In the context of banking, a debit is an expense that reduces the amount of funds available in an account.

How does a debit work?

When you use a debit card to make a purchase, the funds are immediately deducted from your account balance. For example, if you use your debit card to buy a $50 pair of shoes, your account balance will be reduced by $50. This means that you can only spend the amount of money you have available in your account. It’s important to note that a debit card is not a credit card, so you cannot spend more than you have.

Normal accounting balances

Each account in accounting has a normal balance, which is the side that increases the account balance. For example, assets have a normal debit balance, while liabilities and equity have a normal credit balance. Understanding normal accounting balances is important when using debits and credits.

Debit notes

A debit note is a document used to record a debit in a financial transaction. It is commonly used to record a purchase return, discount received, or any other transaction where a debit is needed. Debit notes are important in tracking financial transactions and maintaining accurate accounting records.

Margin debit

Margin debit is the amount of money that an investor borrows from a broker to purchase an investment. The debit balance represents the amount of money that the investor owes the broker. Margin debit is an important concept to understand for those involved in investing.

Contra accounts

A contra account is a type of account that is used to offset another account. For example, a contra account may be used to offset the balance of an asset account. Contra accounts are important in keeping accurate accounting records and maintaining a clear picture of a company’s financial situation.
PRO TIP: Debit card is linked directly to a bank account and allows the user to make purchases or withdraw money from their account without the need for cash or checks. When a debit card is used, the funds are immediately deducted from the linked account, making it a convenient and secure way to access money.

Relationship between debits and credits

In accounting, every transaction has two sides – a debit and a credit. While debits represent expenses and reduce account balances, credits represent income or deposits and increase account balances. Understanding the relationship between debits and credits is crucial to maintaining accurate financial records.

Types of debit cards

There are several types of debit cards available, including standard debit cards, prepaid debit cards, and rewards debit cards. Standard debit cards are linked to a checking account, while prepaid debit cards require you to load money onto the card before making purchases. Rewards debit cards offer perks like cashback or points for every purchase made.

Advantages and disadvantages of debit cards

One advantage of using a debit card is that it allows you to spend only what you have in your account, preventing overspending and accruing debt. Debit cards are also widely accepted and convenient for making purchases. However, there are also some disadvantages to using a debit card, including the risk of overdraft fees if the account balance is insufficient and the potential for fraud and theft if the card is lost or stolen.

How to use a debit card safely

To ensure safe use of a debit card, it’s important to keep track of your account balance and only spend what you have. You should also keep your card in a safe place and report any loss or theft immediately. Additionally, you should regularly review your account statements to ensure there are no unauthorized transactions.


Debit cards are a convenient and useful tool for everyday purchases, but it’s important to understand how they work and their potential drawbacks. By using a debit card responsibly and following safety tips, you can enjoy the benefits of this financial tool while avoiding any potential pitfalls.


How do I get a debit card?

You can usually get a debit card by opening a checking account with a bank or credit union.

Can I use a debit card to build credit?

No, using a debit card does not affect your credit score. To build credit, you need to use credit cards or loans and make timely payments.

Key takeaways

  • A debit is an expense that reduces the amount of funds available in an account.
  • Debit cards are not credit cards and allow you to spend only the amount of money available in your account.
  • There are several types of debit cards, each with their own advantages and disadvantages.
  • To use a debit card safely, monitor your account balance regularly and keep your card information secure.

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