The Differences Between Choosing Credit and Debit at Checkout
Whether the clerk behind the counter swipes your debit card or you do it yourself at the keypad, you’re going to get asked – debit or credit? How do you answer and why? Is there a difference?
Hopefully this will clear things up. Using your debit card as a credit card does not change how your money is treated. Both are debit transactions. What clerks are really asking is which way you’d like the transaction processed – either PIN based (debit) or signature based (credit). Choosing credit over debit does not mean the transaction gets delayed, so be prepared for those funds to exit your account right away.
Different Path, Same Destination
Choosing debit means you enter in your PIN. It is worth noting that the fewer times you use your PIN at retail location reduces the chances of your PIN getting stolen. Using the debit card as credit means you must sign the receipt. However, many merchants no longer require a signature for purchases under $25.00. Either way, once the transaction is processed your financial institution treats PIN and signature-based transactions exactly the same – the money comes out of your checking account immediately.
• Debit requires a PIN
• Credit required a signature
• Money come out immediately either way
Pay Now or Pay Later
True credit cards work very differently. Credit cards are essentially a free 30 day loan. That can be very tempting, but you must be careful. Credit cards, if used unwisely, can lead to debt. Balances you cannot afford to pay off at the end of the 30 days roll over to the next month are subject to interest charges. This is why debit cards can be a useful alternative for those trying to control or avoid debt.
I’ve helped individuals meet their financial goals for more than 16 years. I’m committed to helping our staff provide excellent service and improving the financial well being of our members.
Christopher David, Chief Retail Delivery