Debit Law and Legal Definition

Debit refers to an amount owed or due to be paid as it appears in bookkeepng entries. In bookkeeping practices, a debit is usually entered on the left side of a ledger or account to indicate an asset, addition, or reduction of a liability.

A debit card is issued by many banks, which may be used to make an electronic withdrawal from funds on deposit in a bank, such as for purchasing goods or obtaining cash advances. You do have some federal protections if a thief gets hold of your debit card and goes shopping. Under the Electronic Fund Transfer Act, your liability is capped at $50 if you notify your bank within two days of finding out your debit card is missing. However, your debit card liability could be as much as $500, if you notify the bank more than 48 hours after you learn of the problem or even up to all the money in your checking account plus your maximum overdraft line of credit if you fail to notify the bank within 60 days.