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Debit cards: What are they and how do you use them in Canada?
A debit card give you quick access to your money in chequing or savings accounts. Use it to make in-store or online purchases and to make ATM withdrawals.
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What is a debit card?
Debit cards are payment cards issued by your bank to give you access to your chequing and savings accounts. You can use them to make purchases in-store and to make withdrawals from ATMs across Canada and internationally. You can also use them to make purchases online if you have a debit card that’s linked to a credit card provider such as Visa debit card or Mastercard debit card.
Most debit cards only allow you to access money that’s already in your account. The only exception to this is if you have overdraft protection on your account, which will let you dip into a negative balance, usually for a fee. If you want regular access to cash that you don’t already have in your account, you might want to consider a credit card.
What bank accounts can you link to your debit card?
You can link almost any everyday bank account to a debit card, whether it’s a savings or a chequing account. The account needs to be a Canadian account and must be in the same name as it appears on the card. It can also be a joint account if desired.
Compare debit cards with these bank accounts
How old do you have to be to get a debit card?
Many banks will let you have a debit card on a joint account with your parents between the ages of 13 and 17. Once you turn 17, you’ll usually be able to open your own bank account with a debit card attached to it. If you’re looking for a debit card for your child, compare debit cards for kids.
Features of a debit card
When you are looking for a bank account, the type of debit card that comes with it should play a role in your decision. You will usually be looking for a few different factors, including:
No monthly fees.You can compare fee-free bank accounts to accounts that charge a monthly fee. If you have no need for extra services, you can opt for a fee-free account, meaning you won’t be charged a monthly fee to have a chequing or savings account.
Third party logo.Having either Visa Debit or Mastercard Debit stamped on the card will increase the flexibility and benefits in spending that a debit card provides.
One or multiple ATM networks for free.This is linked to the bank you choose, but you will want to find a debit card that has access to a large number of ATMs for free, especially if you travel often. For example, Scotiabank is a member of the Global ATM Alliance, meaning you can use the card to withdraw money free of charge from hundreds of ATMs worldwide.
Contactless technology.Some debit cards enable you to make purchases using Near Field Communication (NFC) without having to swipe your card or enter a pin. Called “tap and go”, the feature lets you pay for items, costing $100 or less, by holding your card close to a contactless debit/credit terminal.
Fraud protection.You need to protect your debit card from theft and improper use. Make sure you have a unique PIN number set and keep your debit card safe. Banks recommend that you change your PIN frequently to increase protection.
Other security measures.Check what security features your bank provides with your debit card. Your debit card should have secure PIN and chip technology. Also, check to see if you are responsible for unauthorized charges.
Debit cards for students.As a student, you can receive a range of benefits from your debit card, including no monthly fee and occasional rewards.
Debit cards come with a number of benefits that make them a viable option:
Easy to access cash. You can withdraw cash from just about anywhere without needing to visit a branch.
No interest charges. You won’t have to worry about paying interest with debit cards since you can only spend the money that’s already in your account.
Comes free with your bank account. You won’t pay an extra fee to get a debit card as it comes included with your chequing or savings account.
Can be used to shop online. You may be able to use your card to shop online if it sports the Visa Debit or Mastercard Debit logo.
Bad credit doesn’t matter. It’s easy to qualify for a debit card since you’re only spending your own money, even with a Visa Debit card or Mastercard Debit card.
What to watch out for
There are also a couple of drawbacks to consider before you sign up for a debit card:
Potential account fees. The account your debit card is linked to may require you to pay a monthly fee.
Overdrawing too much and being charged fees.If you are not keeping track of the money available in your bank account, you may accidentally go over the limit, resulting in bank fees.
No access to credit. You can’t use debit cards to spend money that you don’t already have sitting in your bank account.
Limited benefits and rewards. The majority of debit cards don’t come with benefits and rewards, so they may not be a good option if you want an all-inclusive card.
Ensuring it doesn’t get lost or stolen.If your debit card is lost or stolen, you could have your funds withdrawn without your permission. Luckily, banks today have technology to identify unusual transactions and will often notify you of the transaction.
How is a debit card different from a credit card?
There are a number of ways that debit cards differ from credit cards. The most important difference relates to how you access funds. Debit cards only let you access cash that you’ve got saved up in your account. Credit cards let you “borrow” money that you eventually have to pay back with interest. Other differences between debit and credit cards include:
Annual fees. You won’t pay any fees to take out a debit card, though you may have to pay for the account your card is linked to. You’ll typically have to pay an annual fee for a credit card unless you opt for a fee-free card with fewer rewards and benefits.
Rewards. Most debit cards won’t let you earn rewards when you spend money (with a few exceptions, such as the Scotiabank SCENE debit card). The majority of credit cards let you earn points or cash back on purchases.
Benefits. It’s fairly unusual for a debit card to offer any type of benefits. Credit cards often come with perks such as travel insurance, roadside assistance, mobile device protection and more.
What is a Visa Debit card or Mastercard Debit card?
Some debit cards come linked to a credit card so that you can make purchases online, such as Visa or Mastercard. This doesn’t mean you’ll get access to credit since you’ll still only be able to spend money from your bank account. However, it does mean you’ll get a credit card number, expiry date and a CVV number. This will let you input your card details online so that you can shop at your favourite stores or pre-authorize reservations without having to leave the comfort of your own home.
How to use a debit card in Canada
What is a debit card pin?
When paying for purchases at a store, you enter your PIN at the point of sale to authorize the transaction on your debit card. Some banks will provide you with a PIN, which you can use one time and then you will be prompted to enter a new PIN. Most banks recommend that you change your PIN regularly for security reasons.
What is Tap & Go® or payWave and how do I know my debit card has it?
Tap & Go® and payWave are both technology that allows you to securely pay for your purchases without having to swipe your debit card or enter your PIN. Instead, you simple tap or wave your debit card at the point of sale. Take a look at your debit card and see if it has the payWave or Tap & Go® symbol on the front. The symbol consists of four curved lines and will likely be located on the right hand side of the card, but this can differ between cards. If your card doesn’t have the symbol, you can call your bank to get a new card.
What is the CVV number on my debit card?
The Card Verification Value (CVV) is a three-digit number found on the back of your debit card. On American Express debit cards, the CVV is four digits. This number is used to verify your debit card and helps to reduce fraud by proving to the merchant that you have the physical debit card with you when making a purchase online or over the phone.
Can I use my debit card to make purchases online?
The only way you can use your debit card to make purchases online is if you have a Visa Debit or a Mastercard Debit. These cards let you spend money out of your bank account to shop online. Check out some more frequently asked questions about online purchases below:
Which online stores accept debit cards? Most big box retailers and major online stores accept debit cards. You simply need to input your Visa Debit or Mastercard Debit card details into your online account in the same way you would with a credit card.
Can I use a debit card on Amazon? You can use a Visa Debit or Mastercard Debit to shop with Amazon in most cases. However, you won’t be able to make purchases with Amazon if you have a normal debit card that isn’t linked to a credit card provider.
Can I use a debit card for PayPal? Much like with Amazon, you can use a Visa Debit or Mastercard Debit to pay off your PayPal balance. You can also link your PayPal account directly to your bank account if you don’t want to link it to your debit card.
Most banks will let you use your debit card overseas but it will cost you more than what you’ll have to pay to spend money in Canada. Find the answers to frequently asked questions about using your debit card internationally below:
What will I have to pay to spend money overseas? You’ll often have to pay high fees for making ATM withdrawals internationally unless your bank account specifies otherwise. You may also need to pay foreign exchange fees between 1% and 3% alongside a margin on the exchange rate to switch between currencies.
Can I use my debit card in the USA? It’s possible to use your debit card in the USA if you’re traveling there in person. Some Visa Debit or Mastercard Debit cards will also let you spend money online in the US. For frequent cross-border spending, you may want to consider a US currency account to cut down on fees.
Can I use my debit card in Europe? You can use your debit card in Europe at certain stores and ATMs. Just be aware that you’ll typically pay high fees and expensive currency exchange rates unless you sign up for a travel debit or a bank account that deals exclusively in Euros.
What happens if I spend too much on my debit card?
If you spend too much money on your debit card, or overdraw, it means you’ve used your debit card when your account balance was zero or really low, and you spent more than the amount you had in your account, resulting in a negative balance. You may be charged a non-sufficient funds (NSF) fee (usually around $45) as a penalty for dipping into a negative balance. The only way you can avoid an NSF fee is if you have overdraft protection on your account. This feature allows the transaction to occur even if you happen to go into the red because a bill comes out early or you have an unexpected expense.
What happens if I have overdraft protection attached to my account?
If your account has overdraft protection, your transaction will go through even when your balance is $0. However, this feature may come with a hefty fee, which is why it’s important to always ensure you have enough money in your account for automatic payments, such as your monthly bills.
I’ve tried to withdraw cash from my account using an ATM, but it has miscalculated the money. What should I do?
If this occurs, try to contact your bank as soon as possible to notify them of the problem. They should be able to get in touch with the branch who takes care of the ATM and sort it out.
How to compare debit cards in Canada
You can compare debit cards and the bank accounts they’re attached to by looking at the following features:
Monthly fees. While debit cards are usually fee-free, you may need to pay for the account they’re attached to. Make sure you get the right bank account for your needs with a monthly fee you can afford.
Ability to shop online. Some cards are linked to a credit card provider while others aren’t. You may want to look for a Visa Debit or Mastercard Debit if you intend to use your debit card to make purchases online.
Free ATM withdrawals. Most large banks and online providers let you withdraw cash from certain ATMs for free. Search for a bank with a large ATM network to make sure you don’t lose money on unnecessary withdrawal fees.
Contactless technology. Some debit cards enable you to make purchases without having to swipe your card or enter a pin. Look for a card that’s enabled with tap and go technology to save time when you pay at the till.
Security measures. Find out which security features your bank provides with your debit card. Your debit card should have secure PIN and chip technology along with fraud protection to cover you against unauthorized charges on your account.
How to apply for debit cards in Canada
To get a debit card, you’ll need to open a bank account with a Canadian bank. You can follow these steps to apply for a debit card:
Compare bank accounts. Compare bank accounts from a number of providers to find the best fit for your unique set of needs.
Apply for the account of your choice. Apply for the bank account of your choice by visiting the main site of the provider you’re interested in.
Fill out application details. Fill out personal details such as your full name, address, email and phone number to start your application.
Click submit. Once you’re ready to apply, click submit on your application or call in to your bank account provider to apply over the phone.
Wait for your card to arrive. When your application is approved, your provider should send your debit card out in the mail or allow you to pick it up at a branch location.
Debit card fraud: is your money at risk?
What is debit card fraud?
Debit card fraud occurs when someone else obtains your debit card details and makes transactions on your card without you knowing. If you report a fraudulent transaction on your card, your bank should deactivate your card immediately in order to prevent the person from making more transactions. An investigation will likely take place to help retrieve or replace your money.
You should always check your debit card statement to make sure all of the transactions listed are legitimate. This will help you identify any unusual activity.
Lost or stolen cards
If your card is lost or stolen, let your bank know straight away, even if you’re travelling overseas. In most cases, your bank will immediately cancel your card and will send you a replacement card as soon as possible.
Can I get a refund on fraudulent transactions?
This depends on your bank and the situation. Many of the bigger banks offer a 100% money-back guarantee on fraudulent transactions if you comply with the card’s conditions of use. For more information, speak to your financial institution.
In both Q1 and Q2 of 2023, approximately 1 in 10 Canadians were looking to open a chequing account — the predominant day-to-day bank account that includes a debit card.
Bottom line
Debit cards let you access your savings or chequing account on the go. You can use them to withdraw money from ATMs or to make purchases in store. You can also use them to make purchases online if you have a Visa Debit or Mastercard Debit. While most Canadians have a debit card, many prefer to make purchases using a credit card. This is because credit cards tend to offer more rewards and benefits than debit cards.
Yes, you can access your savings account with your debit card. Typically, you will need to link your savings account to the debit card, unless you only have a savings account. In this case, it will already be linked to the card.
Since the best debit card in Canada really depends on which account it's linked to, it's important to consider the features of the chequing accounts your new debit card is connected to, based on monthly feeds, the number of free transactions per month, and a host of other features to consider. Compare our best chequing accounts in Canada guide for more detailed information and how to choose the best debit card / chequing account combination for you.
Notify your bank immediately so that they can put a stop on the card. They will then issue a new one as a replacement, which you will receive as soon as possible.
Yes, you can ask for additional cards (typically up to two cards) for family members or business associates, but as the primary account holder you will still be responsible for any actions taken using those cards.
Most point-of-sale terminals offer two options before processing your payment. Let's look at what happens when you select each after swiping or inserting your chip card:
Credit card. After swiping your credit card, you'll have to sign for your purchase. Alternatively, if your card has a chip, you can insert it into the terminal's chip reader and enter your pin number. When you enter a pin, you usually won't have to sign the receipt. Your transaction is processed through the network on your card — typically Visa or Mastercard, and your merchant pays a fee equal to a percentage of your transaction. Your purchase is added to your card's monthly statement.
Debit card. You enter your 4- or 6-digit PIN number, and your transaction is processed through a payment processor system like Moneris. Your merchant will also pay a fee for debit transactions. The amount of your purchase is deducted from the chequing or savings account associated with your card.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
Convenience fees can apply to debit card transactions as well as credit card payments, but only a small number of select merchants can legally charge them in Canada.
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