Breaking Down the Different Types of Debit Cards

By Dan Miller. January 13, 2025 · 8 minute read

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Breaking Down the Different Types of Debit Cards

In today’s cashless society, many electronic financial transactions are done with a debit card. Most debit cards are tied directly to a checking account and withdraw money from it whenever you make a purchase.

However, there are many variations available, such as business debit cards, prepaid debit cards, and HSA debit cards. Understanding the different types of debit cards is important so you can determine which options are right for you and how to use them effectively.

Key Points

•   There are different types of debit cards, including standard, prepaid, business, HSA, EBT, and other specialized options.

•   Standard debit cards are linked to checking accounts, withdrawing funds directly upon purchase.

•   Prepaid debit cards are often available in fixed denominations and can be bought at retail locations; some options are reloadable.

•   Business debit cards linked to business bank accounts help separate personal and professional expenses.

•   Virtual debit cards offer temporary numbers for secure transactions without needing to use a physical card.

Standard Debit Cards

A standard debit card is likely the one that most people are likely familiar with. If you have a checking account with a debit card, your standard debit card will be tied directly to your checking account. When you make a purchase with your debit card, the money is withdrawn from your checking account.

If you attempt to make a purchase with your debit card but don’t have sufficient funds, your purchase may be declined. If you have overdraft protection, the purchase may go through, but you will likely be charged overdraft fees.

Prepaid Debit Cards

Another type of debit card is a prepaid debit card. These prepaid debit cards are often sold in grocery stores, convenience stores, or pharmacies. Prepaid debit cards come in various denominations and often come with a small initial fee that you pay upfront. There are two main types of prepaid debit cards:

Reloadable Prepaid Cards

The first type of prepaid debit card is a reloadable prepaid card. When you buy a reloadable prepaid card, you can usually load it with a specific amount of money at the time of purchase. As you use your reloadable debit card, you can also add additional money to it. You don’t have to worry about overdraft fees when using a reloadable prepaid card, since you are limited to only spending the amount that is available on your card.

Gift Cards

In contrast to reloadable prepaid cards, gift cards are a different debit card variety, one that often comes in a specific preloaded denomination, usually ranging from $10 or $25 to several hundred dollars. Once you purchase the gift card, you cannot add any additional funds to it. You can continue to use the gift card anywhere its network (usually Visa, Mastercard, or American Express) is accepted, but once you have used up the initial funds, the gift card has no value.

Recommended: High-Yield Savings Account Calculator

Teen and Student Debit Cards

There are also debit cards that are targeted to certain demographics and often associated with a specific type of checking account. When you apply for a debit card as part of a teen or student checking account, your debit card will be tied to your account. However, usually anyone who is authorized to make purchases on the account (such as a parent and the child) can use the card.

Business Debit Cards

Another type of specialized debit card is a business debit card, typically associated with a business checking account. Business debit cards can be useful for owners of small businesses, since it helps them keep personal and business transactions separate, as they make purchases for their company, such as buying ad space or paying for supplies.

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Virtual Debit Cards

Many banks and other financial institutions support the creation of virtual debit cards. These virtual debit cards are temporary debit card numbers that are tied to your account. So you could leave your physical debit card at home and make purchases while out and about with a virtual debit card stored in your digital wallet. You can also use a virtual debit card to buy goods and services online and in apps.

Using a virtual debit card number can help protect your account from fraud since you don’t have to use your actual account number or debit card numbers when making a transaction.

Rewards Debit Cards

While perhaps not as common as rewards credit cards, there are some debit cards that offer rewards every time you use a debit card online or in a store. While the exact details will vary depending on the bank or debit card program, you might earn cash back, points, or discounts on certain transactions.

EMV Chip Debit Cards

While debit cards traditionally transferred information by way of a magnetic strip on the back of the card, many debit cards today have an EMV chip installed in them. EMV stands for Europay, Mastercard, and Visa — the companies credited with pioneering cards that have encrypted information stored in the chip. These chip debit cards are considered to be a more secure way of transferring personal details.

Contactless Debit Cards

Another way that debit cards transfer information when making a purchase is through wireless technology known as RFID (radio frequency identification). When you tap to pay vs. inserting your card into a reader, you are accessing this contactless technology. Debit cards that support contactless payment are becoming increasingly prevalent as users look for more convenient ways to make purchases.

ATM Cards

When comparing ATM cards vs. debit cards, it’s important to understand the differences between the two. Debit cards allow you full access to your account, including conducting such transactions as making purchases, getting cash back, and withdrawing cash from an ATM.

ATM cards are more limited, only allowing you to complete financial transactions at ATMs. You might withdraw cash, say, or transfer money between bank accounts.

Specialized Debit Cards

While most debit cards are tied to a checking account, there are some specialized debit cards that work in a different way.

Health Savings Account (HSA) Debit Cards

Health savings account (HSA) debit cards are tied directly to a specific health savings account vs. a checking account. If you have a high-deductible health plan, an HSA can offer a tax-advantaged way to set aside money for qualified medical expenses. When you use a debit card that is tied to an HSA, you are responsible for ensuring that it is used correctly on appropriate expenses. Otherwise, you might face taxes and/or penalty fees.

Electronic Benefits Transfer (EBT) Cards

Electronic Benefits Transfer (EBT) cards are given to participants of Supplemental Nutrition Assistance Program (SNAP). These EBT cards allow SNAP participants to purchase food and use their benefits in a more convenient fashion. An EBT card is loaded each month with the participant’s benefit amount and can be used at most grocery stores and other food retailers.

Choosing the Right Debit Card

Understanding what debit cards are can help you choose the right debit card for your situation. Most debit cards are tied to your checking account, so choosing the right debit card comes down to choosing the right checking account. How a bank’s debit card works is one factor in whether an account suits your needs. For instance, some people may prefer a contactless debit card over other options but will also want to look into such bank account features as monthly fees (if any) and the size of the ATM network.

In addition, different debit cards can suit particular needs, such as:

•   Allowing you to save for qualified medical expenses if you have an HSA

•   Paying for business expenses

•   Giving a gift card as a present

It’s always wise to comparison-shop a bit and compare what a few different possibilities can offer you.

The Takeaway

A traditional debit card is generally tied to a checking account, and purchases made with a debit card are deducted from your account balance. However, these may operate differently (some are contactless, for example) and offer different perks, such as rewards. There are several other types of debit cards, too. These include prepaid debit cards, EBT cards, and HSA debit cards. Understanding the different types of debit cards available can help you make the right choice for your needs.

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FAQ

What’s the difference between a debit card and a credit card?

The main difference between a debit card and a credit card is how funds for a purchase are financed. With a debit card, the funds are removed within a short period of time (often almost instantly) from your bank account. In contrast, purchases made with a credit card are funded as a line of credit with the credit card company. Each charge is posted to your account, and you then have until your statement date to pay for the purchases. If you don’t pay off the debt in full within the specified period, you are assessed an interest charge for the privilege of being extended this credit.

Can I use my debit card internationally?

Whether you can use your debit card internationally depends on the type of debit card you have as well as the policies of your bank or other financial institution. Many debit cards are issued by a major processing network such as Visa or Mastercard, and in most cases you can use them internationally, wherever those processing networks are accepted. If you’re not sure if you can use your debit card internationally, check with your bank before traveling.

Are prepaid debit cards safer than standard debit cards?

Prepaid debit cards come with many of the same fraud protections as standard debit cards. One thing to be aware of is that in many cases a prepaid debit card should be treated as cash. If you lose or misplace your prepaid card, you may not be able to access or recover the money that was on the card. With a lost or stolen debit card, if you cancel it quickly, you can have some protection against unauthorized usage.


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