DEFINITION OF DEBIT

DEBIT

The first thing we are going to do is determine the etymological origin of the term at hand. In this case, we have to explain that it is a word that derives from Latin, specifically from “debitum”, which can be translated as “debt” and that it is the result of the sum of three different parts:

-The prefix “de-“, which comes to indicate “deprivation” or “from top to bottom”.

-The verb “habere”, which is synonymous with “have”.

-The suffix “-to”, which is used to indicate that “the action has been received”.

The idea of ​​debit can be associated with a debt or obligation to pay.

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What is debit

The notion of debit is used in the field of economics and finance. The dictionary of the Royal Spanish Academy ( RAE ) recognizes the term as a synonym of debt : an obligation that must be satisfied or paid.

If we focus on the field of accounting, the debit is an entry that is recorded in the debit and represents something that is already owned by the person. The opposite concept is that of credit, which is recorded in credit.

The debit card is a very popular means of payment.

Card as a means of payment

Debit cards are one of the most used payment mechanisms today. It is a card that has a magnetic stripe and, sometimes, a chip. This card is associated with a bank account (a savings account or a current account): when the user decides to pay for a purchase with the debit card, the corresponding money is withdrawn from the account in question.

This means that the money used to pay for a debit card purchase was part of the subject’s assets. If you had 10,000 pesos in your bank account and you make a purchase of 2,000 pesos with your debit card, the available balance will become 8,000 pesos. When a credit card is used as a means of payment, on the other hand, the buyer incurs a debt: he will have to pay for the purchase in the future.

It is important to keep in mind that if the individual lacks a balance in the bank account, they cannot use the debit card, since there is no money available to debit.

Debit vs. credit

There are numerous advantages that debit cards are considered to have over credit cards and among those we can highlight the following:

-The first and most important is that it prevents the person who has one of them from being indebted. And it is that he will only use the money that he has in an account to which the card is associated. If there is no money in that account, you will not have any.

-In the same way, the fact that it is much easier to contract a debit card than a credit card stands out. This is because for the first one you simply have to open or have a checking account.

-As a general rule, they are usually free and are not associated with any type of maintenance or renewal charge.

-Likewise, it should be noted that they help to have expenses under control, that is, they help not to spend more than they should.

DEBIT