What’s the difference between running my debit card as credit or debit? (2024)

FAQs

What’s the difference between running my debit card as credit or debit? ›

The Bottom Line

While a debit transaction is deducted from your account almost immediately, a transaction processed as “credit” could take several days to authorize and complete.

When you choose to run your debit card as credit, you sign your name for the transaction instead of entering your PIN. The transaction goes through Visa's payment network and a hold is placed on the funds in your account. The transaction usually settles from your account within two to three days.

Generally, running a debit card will have lower processing fees, as it is considered less risky and a bank can verify that the funds are available immediately. However, ecommerce stores and some brick-and-mortar stores run debit cards as credit, making the cost difference between the two card types insignificant.

When you use a debit card, the funds for the amount of your purchase are taken from your checking account almost instantly. When you use a credit card, the amount will be charged to your line of credit, meaning you will pay the bill at a later date, which also gives you more time to pay.

If you run your debit card as 'credit' you can minimize your liability and recover your money quicker in some cases of unauthorized transactions and disputes. Reminder: Remember, running your debit card as 'credit' does not provide credit to cover the purchase.

The answer is yes and no. You can choose “credit” rather than “debit” at the register in many cases, but that doesn't mean your debit card actually acts as a credit card. To better understand the answer, let's look at the differences between these types of cards.

Using credit cards for everyday spending can help you build credit, earn rewards and give you additional protections that you'll miss out on if you pay with cash or a debit card.

Be aware of any convenience fees you'll incur by paying your bills with credit cards. It's best to use credit only for products and services that won't charge a fee, and using cash, debit or bank transfer for the rest. And, of course, use a credit card only if you know you can pay off the balance each month.

Can I assess a surcharge on both credit and debit card purchases? No. The ability to surcharge only applies to credit card purchases, and only under certain conditions. U.S. merchants cannot surcharge debit card or prepaid card purchases.

What is one of the biggest problems with using a debit card? ›

If you overspend, you could get hit with costly overdraft fees: If charges to your debit card cause your checking account balance to go negative, you could suffer overdraft fees and other steep charges that far exceed the potential costs of using a credit card.

Some ATMs will charge withdrawal fees, and if you use more than the agreed overdraft limit then the fees tend to be much greater than those incurred by credit card usage. Another disadvantage of debit cards is the fact that they have limited funds, which can slow down business.

If you find yourself struggling to pay off your credit card, using a debit card may be a better way to manage overspending. "If you have credit card debt, then putting routine purchases on a debit card would make sense in order to avoid going deeper into debt.

Key Takeaways. Credit cards give you access to a line of credit issued by a bank, while debit cards deduct money directly from your bank account. Credit cards offer better consumer protections against fraud compared with debit cards linked to a bank account.

A debit transaction is made with a debit card and occurs when you enter your pin number after swiping or inserting your card. The funds are immediately taken from your checking account through an electronic funds transfer. This is the closest you get to paying by cash with a card.

Because credit cards offer the highest level of consumer protection, they are safer to use for expensive purchases and items that you buy online. However, debit cards are safer when you want to protect yourself against overwhelming and expensive consumer debt.

You can't tell whether a card is associated with a debit or credit account based on numbers alone. Still, you can usually find that out by looking at the card as most of them have a “credit” or “debit” label somewhere on the card.