Debit Cards

DEBIT OR CREDIT? THE REAL DIFFERENCE REVEALED

We've all been there: You're at the register paying for that long-coveted purchase. You swipe your ATM/debit card and the touch screen asks, "Credit or Debit?" If you're like most people, you make a choice without investing too much brainpower, but do you really know the difference between one choice and another? When is credit better than debit--and the other way around?

If you're paying with your ATM/debit card, one thing is always the same: Any credit or debit transaction you make will result in money coming directly out of your checking account. "Credit" transactions are not true credit; payments do not become part of a revolving account, as a regular credit card transaction would. There is no interest and no monthly payments. In this way, "credit" and "debit" charges on your ATM/debit card are largely interchangeable, and in most cases either choice is perfectly acceptable.

There are a few differences, however:

USE DEBIT WHEN:

You want cash back. If your shopping day isn't even half over and you don't have the cash for a triple latte, this is the choice for you.
You like the security of using a PIN. PIN based transactions are much less likely to be fraudulent than signature-based ones.
Your transaction is small. ATM/debit cards carry a limit on purchases and withdrawals. If you're purchasing a big-ticket item, you may exceed your daily spending limit--or send the remainder of the day's transactions into limbo.
Your account is flush. Debit purchases are instantly taken out of your account, just like an ATM transaction.

USE CREDIT WHEN:

You want increased fraud protection. VISA and MasterCard have zero liability policies on debit card purchases that are processed as "credit," meaning you have signed for your purchase rather than punching in a PIN.
Your purchase is big. Because of smaller limits imposed when using PIN transactions, larger purchases are more likely to be authorized using signature debit. Keep in mind that there are still limits to the "credit" side of an ATM/debit card; it's best to confirm this limit prior to making that big-ticket item purchase.

Bear in mind that some retailers charge a fee for either one or both "credit" and "debit" services. To avoid excess fees and unwelcome surprises, ask the retailer what fees may apply prior to making a choice between debit and credit. You'll also avoid excess fees by making sure you have adequate funds to cover any and all purchases you make, credit or debit, before you hit "enter." Adding an overdraft charge to the purchase price of any item can turn the best bargain into a splurge.

The Pacific Transportation VISA® CheckCard is a debit card that you may use at millions of merchants across the world, at thousands of fee free ATM's across the country (including 7-Eleven® stores), and to access your share and checking accounts. You may also use the VISA® CheckCard at stores and get cash back.

Various merchants may offer two different options for debit cards to consumers when making a purchase, either a "credit" option or a "debit" option. How can you tell what the difference is and why you should choose one over the other when offered a choice?

"Credit" option (PINless)

Purchase goods or services at places that accept VISA® debit cards
Order good and services by mail or telephone from places that accept VISA® debit cards
Make automatic payments from your account to pay bills or other charges from places that accept VISA® debit cards
Sign for your purchases in face to face transactions
Money is deducted from your checking account
Have stronger return rights - If a merchant doesn't refund your money, you may have some chargeback rights from VISA®
Ease of use - no need to enter a PIN number
Assist your credit union in savings on costs

"Debit" option (PIN required)

Purchase goods or services at places that accept VISA® debit cards
Money is deducted from your checking account
Cash back is an available option; no need to visit the ATM
Costlier to your credit union

Unless you need to receive cash back, choosing the "credit" option offers more utility for your debit card.

Visit www.usa.visa.com for more information on various VISA® promotions and offers.

Click here for a Debit Card Dispute Form

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