How do Debit/Credit cards know how much money they should have? Especially before the Internet.

Question

When I slidey debit card, how does the card reader know if there is money on it?

I understand nowadays that the card reader probably just asks over the Internet how much money the account has, but debit cards are older than the Internet, so what did they do back then?

In: Technology

Answer 1

There are (and were) “offline” debit cards. The short answer is: there was no way to know. It functions similar to writing a check. If you did not have enough money in your account, you would overdrawn your account into the negative and would be assessed an overdraft penalty.