All About the Visa Debit Card in Canada
By Heidi Unrau | Published on 08 Feb 2023
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SendWhatâs so special about a Visa debit card? Itâs time you understood the plastic in your wallet. A Visa debit card is a type of bank card that allows you to make purchases and withdraw cash from ATMs, just like a regular debit card. The difference is that it also allows you to make online purchases and international transactions, too. But before you go swiping left and right, let’s talk about how it works, the pros and cons, and where to get one.
How does a Visa debit card work?
A Visa debit card works by drawing funds directly from your bank account, similar to a regular debit card. But with the added perk of being able to use it anywhere that Visa is accepted. Think grocery stores, restaurants, gas stations, online shopping, international transactions, you name it. You can also use it at ATMs around the world.
The only difference is that youâre spending your own money instead of borrowing the funds from a credit card company. That means you donât need to apply for a Visa debit card or submit to any credit checks.
Just make sure you have enough in your linked account and youâre good to go. Other than that, it’s a total lifesaver when you need to make a purchase but left your cash at home or need some extra flexibility to suit your shopping preferences.
Visa debit cards vs other payment cards
A Visa debit card functions in many of the same ways that other payment cards do, but with a few key differences. Visa debit cards are typically issued by financial institutions, like banks and credit unions, and are linked to your chequing account.
In Canada, a bank-issued Visa debit card is usually an Interac debit card, which is a Canadian interbank network that links financial institutions and other businesses. Interac-enabled cards are able to use Automated Teller Machines (ATMs) and point of sale (POS) terminals. Here are the key differences between a Visa debit card and the other payment cards youâre used to:
Traditional credit cards
A credit card is not linked directly to your bank account. Instead of spending your own money, it allows you to borrow money from the credit card issuer. Because of this, you typically need to apply for a credit card and submit to a credit check. Credit cards often come with higher fees, double-digit interest rates and a credit limit, which is the total amount you can charge to the card.
Every time you use a traditional credit card to make a purchase, you are borrowing money that must be paid back. You’ll be charged interest if you donât pay off your purchases within the interest-free grace period.
Regular debit cards
Both Visa debit cards and regular debit cards are issued by financial institutions like banks and credit unions, and function in almost the exact same way – with one key difference.
A regular debit card is linked directly to your bank account, so when you make a purchase, the funds are immediately deducted from your account balance. It can be used at POS terminals and ATMs in Canada that accept the network the card is linked to, like Interac.
However, since it is not a Visa debit card, it cannot be used on the Visa network. That means a regular debit card does not have the added perk of being used like a credit card – it cannot be used for things like online and international transactions.
Prepaid cards
A prepaid card is a type of payment card that is pre-loaded with a certain amount of money. The card can be used to make purchases at merchants that accept credit cards Visa and Mastercard, and the funds are deducted from the balance on the card.
Prepaid Visa cards can be purchased at various retail locations such as convenience stores and supermarkets. They can be used by people who do not have a bank account or who prefer not to use credit or debit cards linked to their personal bank account.
Having said that, there are some neobanks in Canada that offer a prepaid card that is co-branded with Visa or Mastercard and linked to your account. While it may have âprepaidâ in the title, it can be used online, abroad, and anywhere that accepts Visa or Mastercard, whichever is branded on your card. Every time you make a purchase, the funds are deducted from your account balance.
Where to use your Visa debit card
Are you ready to flex your Visa debit card like the financial boss you are? Hereâs where you can do just that.
First off, you can use it at any Canadian merchant online, over the phone, and even by mail. That’s right, you can shop til you drop without ever leaving your couch. But stay on budget!
Heads up, globetrotters! Visa Debit has your back too. Use it at participating US and international merchants online, in mobile apps, over the phone, and even by mail order.
And if you happen to find yourself outside of Canada, like an impromptu trip to Target, don’t fret. You can still use your Visa Debit (just not the virtual one) wherever Visa is accepted. Just look for the Visa logo and you’re good to go!
So go forth and shop the best products and services out there. The world is your oyster – or mall, rather. Just make sure you spend responsibly to support your financial goals.
Ways to pay with a Visa debit
Say goodbye to debt traps and hello to a new and improved form of payment. Not only is it accepted globally, but it also gives you multiple options for transactions.
Contactless
You can use your Visa debit at any merchant with the Visa logo. Easy peasy.
You can also “tap and pay” or “tap and go” at merchants with contactless terminals. Just hold your card over the reader until you hear it beep. No more fumbling with cash or trying to find the right card in your wallet.
Swipe
But what if the merchant doesn’t have a contactless terminal? No problemo. Just swipe that bad boy through the card reader. You may need to enter a Personal Identification Number (PIN), which is the four-digit code associated with your card to authorize the transaction.
Alternatively, you may need to sign a copy of the receipt for the merchantâs records. This is standard anti-fraud practice to ensure your signature matches that of the authorized user should the transaction ever be called into question.
What are the benefits of a Visa debit card?
Using a Visa debit card has several perks, including:
Convenience: Visa debit cards are widely accepted at merchants across Canada and around the world. This makes it easy to make purchases and withdraw cash without having to carry large amounts of cash or multiple forms of payment.
Safety: When you use a Visa debit card, your personal information is protected by multiple layers of security. This makes it much safer than carrying cash or writing cheques.
Control over spending: Because a Visa debit card is linked to your bank account, you can only spend what you have. This can help you stay within your budget and avoid overspending or wracking up credit card debt.
Access to cash: Visa debit cards can be used to withdraw cash at ATMs or to get cash back when making a purchase at a merchant.
Rewards and benefits: Some Visa debit cards come with rewards programs like cash back, points, or other perks like purchase protection and emergency card replacement.
Online shopping: Visa debit card is also convenient for online shopping because it allows you to make purchases without having to use a credit card.
Access to your account balance: Many Visa debit card providers offer online banking and mobile apps that allow you to check your account balance and transaction history in real time.
Are there any downsides?
Of course, there are no perfect products. A few downsides to consider include:
Limited protection against fraud: While Visa debit cards offer some protection against fraud, it may not be as comprehensive as the protection offered by traditional credit cards.
Limited acceptance: Some merchants may not accept Visa debit cards, particularly those that are online or located outside of Canada.
Fees: Some banks may charge fees for using a Visa debit card, such as monthly account fees or transaction fees.
Limited creditworthiness: Using a Visa debit card does not help build credit, unlike credit cards which can help establish credit history when used properly. Since you are using your own money instead of borrowing it, nothing reports to the credit bureaus.
Lower limits on cash withdrawals: Some banks may have lower withdrawal or purchase limits when using a Visa debit card at an ATM or POS terminal than they do for credit cards.
Where can I get a Visa debit card?
Several financial institutions offer a Visa debit card to make accessing your money easier than ever. Hereâs where you can get one, along with a few of their most popular accounts:
