Choosing Debit Vs Credit at Checkout


I’m sure you’ve encountered the following question when swiping your debit card at a gas station or retail store:  “credit” or “debit?”  The question might better be phrased as “PIN or signature?” So what should you do? Does one card do BOTH transaction types? Does it really matter which one you choose? Let’s break it down.

What happens if you swipe as debit?

  • Payment comes from your account
  • You are required to enter a PIN- personal identification number
  • Your account decreased immediately
  • Transaction fees less expensive for retailer
  • No rewards for using
  • Amount may be limited per day
  • Can get cash back but in addition to purchase

What happens if you swipe as credit?

  • Payment comes from your account
  • You are required to sign your name to authorize payment
  • Account decreases immediately
  • Retailer pays more in transaction fees
  • Bank may offer “rewards” for using
  • No limit on amount
  • No cash back option

Debit cards are NOT credit cards, no matter the transaction type. They may look alike and share the same logos, but they are NOT equal. The most important difference is where the money comes from.

When using a Debit Card… 
You essentially make an electronic payment. Money is taken directly from your account you linked to the card. Your account balance decreases when you use the card, and you do not get a monthly bill. The card works at ATMs (Automated Teller Machine) as well as for store and online purchases. Lastly, a debit card is NOT issued without an account.

What is the difference between swiping your debit card as credit vs using an actual credit card?
When using a credit card you are NOT using your own money. Rather, the amount you charge is a loan until you pay it back, hopefully when the bill arrives. Your bank or credit union may issue the credit card to you, but the card is not tied to your account. In fact, the credit card is not tied to a bank account.


So next time you head to the store, think before you choose debit or credit. Why are you choosing one over the other and what are the pros and cons of each one? Either way, the money will be withdrawn directly from your banking account. If you want to earn rewards or enjoy a float of a day or two, you may want to opt for credit. Otherwise, choosing debit might be the safer option.


Until Next Time,

Jessica M.

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