Debit cards run off bank accounts. This means that they are reliant on the funds within the account, and if the funds are running low then there is the danger that the funds will not be sufficient for a transaction.
In these cases it is said that there are insufficient funds in the account. A number of things may happen at this point.
It is important to remember that insufficient funds come at the point that the person is about to run out of funds when they make a purchase, rather than that they have already run out of funds. So if there is $200 in an account and there is a $250 transaction that is going through then there will be an attempt to spend $50 more than there is available in the account. Rather than allow the $200 to be billed and the $50 to be rolled over, the whole account is likely to be refused.
It is possible to split cards in these circumstances. This is when more than one card, or a card and cash, are used to buy a good. In the example above there may be $200 in the account for a $250 purchase. If the card holder knows that there is only $200 in the account then they may decide to pay for $200 of the purchase with the debit card and the other $50 either with cash, a credit card or with the debit card of another account. Almost all shops allow a split of a debit card in this way as although it may be more complex, if they do not do it in this way they will simply not get the sale.
Cards that do get insufficient funds that do not have credit facilities, such as a savings account, will be turned down and the purchase will not be made. In these cases there should be no money that is taken off the card.
If there is a credit facility on the card, for example it may be a transaction account with the ability for the account to go into overdraft; this may also get turned down.
Another thing that may happen is that the underlying account may go into an unauthorised overdraft. This will tend to have both a fairly high interest rate but it may also have a high penalty charge as well.
