Debit card

What it means

A debit card is a payment card linked directly to a current account, with payments taken from money already in the account. Unlike a credit card it provides no credit, so you cannot spend more than you have unless an overdraft is attached to the account.

It is used for payments in shops, online and for cash withdrawals. Online payments are protected by 3D Secure verification, where you confirm the payment in your bank's app, and when paying by phone the card number is replaced by a token.

On a business account it is issued as a company card for the director or staff. It is convenient for routine spending because transactions appear straight on the bank statement, where the accountant sees them with all other movements.

How it works in practice

Every company card payment must be supported by a document such as a till receipt or an invoice made out to the company. The statement alone is not an accounting document, so cardholders should hand in receipts regularly, ideally through an app that matches them to the transaction.

For payments abroad, the bank converts the amount into euros at its own rate and may add a fee. In the accounts, the expense is translated at the rate under the chosen method, and the difference from the amount debited is booked as an exchange difference.

If a merchant fails to deliver or charges twice, the cardholder can request a chargeback through the bank. Deadlines are limited, so statements should be checked regularly, not only at the year-end close.

What to watch out for

Private payments with a company card complicate the books. In a limited company they create a debt of the director to the company that must be repaid, or they may count as a benefit in kind or a hidden profit distribution. It is simpler to use a separate card for private spending.

Card limits, such as daily payment and withdrawal limits, provide protection if a card is lost or stolen. The company should set limits to suit each cardholder and block the card immediately when an employee leaves.