If something is coming into my account will it be debit or credit in my account?
"The bank will make this even more confusing because they use the terms from their own perspective. From the bank's perspective  (printed on your statements) credit: Money into your account  (increases the bank's liabilities) debit: Money out of your account  (decrease bank liabilities) From your perspective: It depends on the nature of the transfer of money, but here are the most common for a personal account. Income into your account: Credit Expenses out of your account: Debit Payment on a loan made for an asset (house/car): Credit for the loan account, debit for the equity account for the car/house/etc. Yes, it's complicated. Neither credits nor debits are always a + or -. That's why I agree with the advice of the others here that double-entry accounting is overkill for your personal finances. Note: I simplified the above examples for the purpose of clarity. Technically every transaction in double entry accounting includes both a credit and a debit (hence the ""double"" in the name). In fact, sometimes a transaction involves more than one credit or debit, but always at least one of each. Also, this is for EACH party. So any transaction between you and your bank involves at least FOUR debits and/or credits when all involved are considered." It sounds like you're mixing a simple checkbook register with double-entry bookkeeping. Do you need a double-entry level of rigor? Otherwise, why not have two columns, one for income (like a paycheck) and one for expenses (like paying a cable bill)?  Then add up both columns and then take the difference of the sums to get your increase or decrease for the time period. If you want to break up income and expenses further, then you can do that too. I agree with mbhunter's suggestion of labeling your columns, 'income' and 'expenses'. However, to answer your question, money coming in (a paycheque, for example) is credited to your account. Money going out (a utility bill, for example) is debited from your account. There's no real 'why'... this is simply the definition of the words. "If you are considering this to be an entry for your business this is how you would handle it.... You said you were making a balance sheet for monthly expenses. So on the Balance Sheet, you would be debiting cash. For the Income Statement side you would be crediting Owner's Equity to balance the equation: Assets = Liabilities + Owner's Equity So if you deposited $100 to your account the equation would be affected thus: $ 100 in Assets (Debit to Cash Account) = 0 Liabilities - $100 (Credit to Owner's Equity) It is correctly stated above from the bank's perspective that they would be ""Crediting"" you account with $100, and any outflow from the bank account would be debiting your account." "The bank ""credit's"" your account for money coming into it. In double entry accounting, you always have a debit and a credit to balance the accounts. As an Example: for $500 that the bank credited to your checking account, you would post a debit to Cash and a Credit to Income Earned. The accounting equation is: Assets = Liabilities + Owner's Equity                             $500   =                    $500 Cash is the ""Asset"" side of the equation, Income is part of Owner's Equity, and so is the Credit side... to make the equation balanced." Most bank registers (where you write down entries) show deposits (+) to account as a CREDIT. Payments, fees, and withdrawals are DEBITs to your bank accounnt. On loans such as credit card accounts, a credit to your loan account is a payment or other reductions of the amount you owe. A charge to your account is a DEBIT to you loan account. They did this just to confuse us!
a typical debit card is subject to several limits: Based on the definitions I found on Investopedia, it depends on whether or not it is going against an asset or a liability.  I am not sure what type of accounting you are performing, but I know in my personal day-to-day dealings credits are money coming into my account and debits are money going out of my account. Definition: Credit, Definition: Debit Credit card, without a doubt. The reason is dispute resolution. If you dispute a charge on debit card - the money has left your account already, and if the dispute was accepted - you'll get it back. If. Eventually. In the mean time your overdraft will be missing $$$. For credit cards, you can catch a fraud action before the money actually leaves your pocket and dispute it then. In this case the charge is set aside, and you will only be required to actually pay if the dispute is rejected. I.e.: The money stays in your pocket, until the business proves that the charge is legit. In both cases, if the dispute is justified (i.e.: there was indeed a fraud) neither you nor the bank will lose money at the bottom line, it's just who's got the money during the dispute resolution process (which may be lengthy) that matters. "As others have stated, credit (signature required) is processed through their respective networks (Visa, MasterCard, Discover, or American Express). A ""debit"" card tied to your checking account, still go through the same credit network even though the funds are guaranteed from your checking rather than a free loan 30-60 days which has the potential to be unpaid. This type of debit card purchase may be eligible for a lower processing rate for less risk. Debit cards can also be processed through the debit network (PIN required, no signature). This is typically a straight fee such as $0.35.  Fees vary, but let me give you a simple comparison: Say you are at the supermarket and buy $50 worth of groceries with a debit card with Visa logo. You are asked ""credit"" or ""debit"": At my supermarket, this is why I am given the option to enter my PIN first. If I want to pay by credit, I have to tap Cancel to process via credit signature." Debit cards do not earn the bank any interest from you whereas credit cards do, so they want to give incentive to use credit over debit. Just use a credit card like AMEX Blue that categorizes your purchases, and reconcile at the end of the month. There is no good reason to use a debit card. "The terms debit and credit come from double-entry book-keeping. In this system, every transaction is applied against two accounts: it debits one and credits the other by equal amounts. (Or more technically, it affects two or more accounts, and the total of the credits equals the total of the debits.) Whether a debit or a credit adds or subtracts from the balance depends on the type of account. The types of accounts were defined so that it is always possible to have these matching debits and credits. Assets, like cash or property that you own, are ""debit accounts"", that is, a debit is an increase in the balance of the account. Liabilities, like money you owe, are ""credit accounts"", that is, a credit is an increase. To get into all the details would require giving a tutorial on double-entry book-keeping, which I think is beyond the scope of a forum post. By a quick Bing search I find this one: http://simplestudies.com/double-entry-accounting-system.html. I haven't gone through it so I can't say if it's a particularly good tutorial. There are plenty of others on the Web and in bookstores. Note that the terminology can be backwards when someone you're doing business with is describing the account, because their viewpoint may be the opposite of yours. For example, to me, my credit card is a liability: I owe the bank money. So when I post a charge, that's a credit, and when I pay it off, that's a debit. But to the bank, my account is an asset: the customer (me) owes them money. So to the bank, a charge is a debit and a payment is a credit." Hmm, let's see, I always get Credit and Debit mixed up, but I'll try: Signing of the contract: Receiving 500 deposit: When you are done Accounts Receivable will have $500 (because you are owed $500), Revenue will have $1000 (because you made $1000 on an accrual basis), and Cash will have $500 (because you have $500 in your pocket). Credited to your account means amount has been deposited to your account(this will be your income). Debited from your account means withdrawn from your account(This will be your expense). Hope this clarifies your question. Regards Jayanthi CC always (applies only if you pay your balance in full). First you rack up points on your card, second if there is an unauthorized pull a Cc will help you a bank may or may not. As a general advice don't hand out your banking information like a credit card number. Now paying bills through the bank is a different matter.  This advice applies to companies that would like to pull money from bank accounts.  Never do that if Cc is an alternative. Just to put in one more possibility: my credit card can have a positive balance, in which case I earn interest.  If more money is due, it will automatically take that from the connected checking account. If that goes into negative, of course I have to pay interest.  I chose (argued with the bank in order to get) only a small credit allowance. However, I'll be able to access credit allowance + positive balance. That allows me within a day or so to make larger amounts accessible, while the possible immediate damage by credit card fraud is limited at other times.  Actually, the credit card pays more interest than the checkign account. Nevertheless, I don't keep high balance there because the risk of fraud is much higher for the credit card. There's the fear that one might forget the debit is coming and still bounce the payment.  Personally, I agree with Dheer's list, I don't want to give someone unlimited access to my account. I make good use of electronic payments where I initiate the payment.  For the credit card I use regularly, I have a $250 monthly payment set to go automatically. If I forget to make a payment or lose the bill, at least the minimum is covered. The monthly charges are enough that when I actually pay the bill in full upon receipt, it just goes in toward current charges.  Bills like gas/electric/phone are different every month, so an auto-debit is actually more trouble than how I handle. Etiquette doesn't really come into the picture here. The business offers a service and I choose to accept it. Personally, I use my debit card as much as possible. For every transaction, I record it in my checkbook. Then, when I do reconciling, I know exactly how much I paid for various categories of stuff. Good for budgeting. Most often my purchases are over $10 but when they aren't, I have no qualms about using the card. Here's a simple answer: If your debit card has a visa or mc logo, it can be used as a 'credit card'.  In order to do so, you shouldn't enter the pin, instead choose 'credit' and sign for it. Unlike a credit card, you can't spend money you don't have but like a credit card, your purchase is protected by the credit card company (visa/mc) and gives you privileges like zero fraud liability and purchase disputes. http://www.moneycone.com/should-you-sign-for-a-debit-card-purchase-or-use-your-pin/ I am using my debit card regularly: in ATM's with a pin, in stores with my signature, and online. But later you say  But from what I recall from starting my own business (a LONG time ago), for debit cards there's only a per-transaction fee of like $0.25, not a percentage cut. Only pin transactions have just a per-transaction fee paid by you to the merchant (and you are reimbursed by Schwab).  If you use your card with just a signature or online without a pin, then it is a credit transaction from the merchant's perspective.  The merchant pays a fee and Schwab gets its cut of that.  So for two of the transaction types that you describe, the merchant pays Schwab (indirectly) out of your payment.  Only when you enter your pin does it process as a debit transaction where Schwab pays the merchant.   Because check cards withdraw the money from your account immediately, you don't even get the twenty to fifty day grace period.  So those merchant fees are pure profit for Schwab, offsetting the loss from the ATM fees.   You claim $4-5k in fees at $.25 each.  That's sixteen to twenty thousand transactions.  Assuming that several is four to five years, that's more than ten transactions a day.  That seems like a lot.  I can see three for meals, one for miscellaneous, and maybe some shopping.  But if I go shopping one day, I don't normally go again for a while.  I have trouble seeing a consistent average of five or more transactions a day.   Even if we use just the higher ATM fees (e.g. $2), that's still more than a transaction a day.  That's an extreme level of usage, particularly for someone who also makes frequent purchases via card.   I haven't done any other business with them. I find this confusing.  How does money get into your account?  At some point, you must have deposited money into the account.  You can't debit from an account without a positive balance.  So you must have done or be doing some kind of business with them.  If nothing else, they can invest the balance that you deposit.  Note that they make a profit off such investments.  They share some of that profit with you in the form of interest, but not that much really.   Of course, Schwab may still be losing money on your transactions.  We can't really tell without more information on how much of each transaction type you do and how much of a balance you maintain.  Perhaps they are hoping that you will do other, more profitable, activities in the future.   I doubt there are that many Schwab customers like you describe yourself.  As best I've been able to see, they advertise their banking services just to investment customers.  So it's unlikely that many customers who don't use their investment services use their banking services just for ATM reimbursements.