A debit card deducts money directly from your checking account. When you pay, the money leaves your account immediately, or within a day or two. There is no bill, no interest, and no debt. It is your money. That simplicity is why debit cards are so popular. Americans use them for billions of transactions each year.

Debit cards look like credit cards and are accepted wherever credit cards are. They have a card number, an expiration date, and a security code. They can be used online, in stores, and at ATMs. Most have a Visa or Mastercard logo, which means they work worldwide. Some are contactless. Some have a chip.

Debit cards have protections. The Electronic Fund Transfer Act limits your liability for unauthorized transactions to $50 if you report the loss within two business days, and $500 if you report it later. If you fail to report an unauthorized transaction within 60 days of your statement, you may be liable for more. Credit cards offer stronger protections, which is one reason some people prefer them for online purchases.

Debit cards also have drawbacks. They do not build credit history. They can trigger overdraft fees if you spend more than your balance. They offer fewer rewards than credit cards. And if your card is compromised, the money comes out of your account immediately, which can cause a cash flow problem while the bank investigates. A debit card is a tool for spending, not for borrowing.