Cards & Payments

A payment card linked directly to your checking account, so when you use it the money comes out of your account almost immediately and you are spending what you already have rather than borrowing. This is the biggest difference from a credit card, which gives you access to borrowed money that you repay later. Debit cards also double as ATM cards for withdrawing cash, checking balances, and sometimes depositing money.

APR (Annual Percentage Rate) is the yearly cost of borrowing money, expressed as a percentage. It usually includes the interest rate plus certain fees, which makes it a fuller measure of a loan’s true cost and the standard tool for comparing financial products side by side.

An overdraft happens when your account balance drops below zero after a transaction is processed, and the bank covers the shortfall instead of declining it. When that happens, the bank may charge an overdraft fee, so you repay the amount you went negative plus the fee.

A purchase that has been authorized but not yet settled, sitting in the space between being approved and being fully posted to your account. During authorization the bank or card issuer confirms the card is valid and reserves room for the charge, while settlement, when the merchant collects the money, often happens later in daily batches or after weekends and holidays. This gap is why a purchase may not show up on your formal account statement right away and why your available and current balances can differ.