Is ID Required to Use a Debit Card?

Instead of writing checks to pay for purchases, more and more consumers are using debit cards. Generally speaking, a debit card does not require the user to show identification to the merchant. Yet, some merchants may have a store policy requiring customers show identification, especially if the customer is not using his personal identification number (PIN) with the card.

A debit card looks like a credit card. When using a debit card, the funds for the purchase comes directly from the cardholder’s bank account. With a credit card, funds provided by the credit card company pay for the purchase, which the consumer repays later. In essence, the debit card is similar to writing a check, yet instead of a paper check, the plastic debit card goes through the credit card machine and the funds transfer electronically from the consumer’s bank account into the merchant’s account.

The consumer selects a PIN when setting up a debit card account. This is a series of random numbers, known only to the cardholder and entered electronically (by the cardholder) into the system. When using the card, the consumer enters his PIN, which is similar to signing a check. This authorizes the payment. Sometimes a consumer may opt to use a signature, instead of a PIN number. In this case, the card processes like a credit card.

Depending on the store’s policy, you may be required to show an ID when using the debit card without the PIN. Some merchants may ask you to show identification when using a PIN, yet this is not common practice.

When losing a credit card versus a debit card, it is far easier for a thief to use the credit card illegally. Yet, if the consumer loses the debit card, and the finder has access to the cardholder’s PIN, the thief can easily use the debit card. This is why the cardholder should memorize his PIN and not keep it with the debit card. Report stolen cards to the bank within two days, as the Truth in Lending Act protection makes you liable for losses due to theft, up to $500, if not reported immediately. If reported within two days, your liability is $50. Waiting longer than two months to report the theft can make you liable for more.