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Check card

Check cards use the funds in your account to make payments. Bankrate explains.

What is a check card?

A check card is a type of bank card that allows an account holder to access funds in her account. Check cards were once to facilitate the writing of a check prior to the development of electronic payment systems. As the process of releasing funds to another person has become automated, check cards have become synonymous with debit cards.

Deeper definition

Originally, check cards were used to verify payments made using a check. As checks have gone out of style for purchases, check cards have become increasingly able to withdraw or deposit cash at an ATM or to make purchases anywhere that accepts bank cards. Today, check cards are largely indistinguishable from debit cards.

Most check cards feature a magnetic strip along the bottom of the back of the card, containing the card holder’s personal information, including the checking account number, the card holder’s name, and information pertinent to the use of the card. Although they resemble credit cards in appearance, check cards must be linked to a checking or savings account.

As with other ATM cards, to access the funds, the card holder must enter a personal identification number (PIN). In addition to a PIN, newer cards, known as smart cards, use chips that generate a unique one-time encrypted code every time the card is used. This cuts down on fraud and identity theft.

When you open a new checking account, you’ll get a new check card, too. Be sure to use Bankrate’s checking account comparison tool to select the best account for your needs.

Check card example

It’s a Friday night and Tom is going out to dinner with a group of friends. But he doesn’t have enough cash in his wallet to pay for his portion the restaurant bill. So Tom stops off at an ATM machine to withdraw some money using his check card.

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