Debit cards are a prominent feature of modern-day personal and small-business banking. The cards allow immediate access to cash, balances and banking services. You can also use most debit cards as credit cards for in-person and online purchases. You swipe the card like a credit card, then enter a personal identification number, or PIN, to carry out your transaction. Debit card information is reported as part of your monthly bank account statement, much as is your savings and checking account information.
Debit Cards
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Debit cards typically are issued by banks and credit unions to their account holders. The cards offer convenience in the form of ready access to cash at automated teller machines, and buying options including point-of-sale payments and credit card-style purchases. Unlike credit cards, however, debit cards do not allow you to run up or carry a balance, and the funds used are immediately removed from your bank account. Your purchasing power is therefore limited to the amount of money you have in your checking or savings account. Most debit cards come with daily limits for ATM cash withdrawals, and some also limit the number or cumulative total of purchases you can make in a day.
Personal Information
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Debit card transactions are included in the monthly account statement for your personal or small-business bank account. You can access these statements electronically in many cases, or opt to receive a printed copy by mail each month. Both versions include important information about the account holder, whether it is an individual or a small business. Your name or business name, address, account number, account type and the period covered by the statement are among the data displayed at the top of each one. The body of the statement lists deposits, withdrawals, purchases and fees, as well as any interest earnings. At least one major financial institution, Bank of America, offers small-business owners an online option to view the statements for both their personal and business accounts on the same page, allowing them to carefully track these often intertwined money streams.
Debit Card Transactions
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Debit card transactions are listed on the monthly statement much as any other transaction. Reported information typically includes the date of the purchase or ATM withdrawal, the amount, the location of the purchase -- store or restaurant name, for example, or street address of the ATM used -- and any related fees. The exact details of the purchase, such as the exact type of food, movie or office supplies, usually are not included on the bank statements. You also will know immediately if it is your company's debit card that was used, because the last four digits of the card will appear with the purchase details. When using your debit card to purchase goods or services for your small business, keep the actual detailed purchase receipts for tax purposes, since the IRS or state tax authorities require very specific proof of all claimed business expenses.
Avoiding Fraud
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Debit cards work in ways similar to credit cards, but it can be harder to protect against industrious thieves. They use devices called skimmers to read your account number and the accompanying PIN when you use the card at ATMs, gas station pumps and other locations. Banks and fraud experts recommend against using your debit card and PIN at unfamiliar or isolated ATMs or off-brand gas stations, which may not employ strong anti-skimming measures. To avoid unauthorized use of your personal or business debit card, don't write down your PIN or share it with anyone, and protect your information from prying eyes when you use it yourself. One benefit offered to small businesses using a debit card from major card issuers is that the business is not liable for any fraudulent uses of the card when cases are reported promptly. Monitoring your statement online on a regular basis allows you to clearly identify any potential misuse of your card.
