Last Christmas, Marcie Knapik Sanders of Charlton, Mass., got a plastic card in the mail that she thought was a MasterCard. It came unsolicited from her new bank, the Shawmut. If she spent enough money with it, she could win a Jeep Cherokee. So she put her other card away and bought Christmas presents with the new one.

Big mistake. Although it looked like a credit card, felt like a credit card and acted like a credit card in the stores, it wasn't one. It was a debit card, and there's a world of difference. Debit cards are valuable financial tools, but you have to know how to use them. Because she didn't, Marcie Sanders accidentally bounced five small checks. Her bank covered them but charged her $110 in overdraft fees.

The debit card you know best is the classic ATM card. You use it for deposits and withdrawals at an automated teller machine. In many gas stations, convenience stores and supermarkets, you can use your ATM card in lieu of cash. You put the card in a terminal and enter your PIN number; money to cover the purchase is instantly paid to the merchant from your account. If not enough cash is available, that purchase is turned down on the spot.