What type of transactions are described as those that reduce your balance?

When considering transactions that reduce your balance, debit transactions are the most relevant. These transactions represent money being taken out of an account. For instance, when you make a purchase, withdraw cash, or pay a bill using your bank account, the amount of the transaction is deducted from your account balance.

In contrast, credit transactions typically involve money being added to your account, such as when you receive a payment or make a deposit. Investment transactions relate to the buying or selling of assets with the purpose of generating returns, while equity transactions are focused on ownership stakes in companies and do not directly affect account balances in the same manner as debits. Thus, understanding debit transactions is crucial for managing personal finances, as they directly impact the available balance in your account.