What immediate action occurs when a debit card is used for a purchase?

What immediate action occurs when a debit card is used for a purchase?

• A. The transaction is held for processing
• B. The funds are reserved in the account
• C. The purchase amount is immediately deducted
• D. The transaction is recorded as a credit

Answer: (C)

When a debit card is used for a purchase, the purchase amount is immediately deducted from the cardholder's bank account. This is because debit cards are directly linked to the bank account, allowing for real-time transactions. As soon as the card is swiped or the details are entered for an online purchase, the authorization and deduction of funds occur almost instantaneously. This immediate deduction helps ensure that the available balance in the account reflects the new financial status after the transaction. It also means that the cardholder cannot exceed their account balance when making a purchase, as the system validates the available funds before completing the transaction. This feature of debit cards is what distinguishes them from credit cards, where the transaction may be processed differently, involving payment at a later date rather than immediate deduction.

When a debit card is used for a purchase, the purchase amount is immediately deducted from the cardholder's bank account. This is because debit cards are directly linked to the bank account, allowing for real-time transactions. As soon as the card is swiped or the details are entered for an online purchase, the authorization and deduction of funds occur almost instantaneously.

This immediate deduction helps ensure that the available balance in the account reflects the new financial status after the transaction. It also means that the cardholder cannot exceed their account balance when making a purchase, as the system validates the available funds before completing the transaction. This feature of debit cards is what distinguishes them from credit cards, where the transaction may be processed differently, involving payment at a later date rather than immediate deduction.