If you’re younger than 30, you probably run your entire financial life through your debit card. If you were born before the mid 70’s, however, you may have only the vaguest sense of how one actually works. So let’s start with the basics.

The 1980’s brought us the widespread rollout of the automated teller machine, or ATM. When you opened a bank account, you’d also get a plastic card that you’d stick into the machine to take cash out. Simple enough.

By the 1990’s, however, banks started pasting Visa and MasterCard logos on those ATM cards. That allowed users to slap the card down anywhere those credit cards were accepted, sign for the purchase and have the money sucked straight out of their bank account. We could carry less cash around and we didn’t have to worry about piling up debt on a credit card.

Because this new card worked a lot like writing a check, it was often known early on as a “check card.” But because it yanks – or debits – the money from a bank account so quickly, the name debit card soon took hold.

Banks were thrilled. Turns out they get a little slug of money every time someone uses a debit card to pay for something; Visa and MasterCard do too, which is why they take out ads promoting the cards, even though it’s the banks that create the relationships with the customers and have their brands in big letters on the card.

Want to Know More?

• Do You Need a Debit Card?
• Make the Most of Your Debit Card
• Grilling Guide: Questions to Ask When Getting a Debit Card