Pay credit or debit with my ATM card?

Question

At the grocery store, for example, my bank suggests I select "credit". Both ways, funds are drawn from my checking. What's the difference, and which way is better for me?

Answer 1

With Debit you have to enter your pin number.. a place like a grocery store isn't a very secure environment

Answer 2

With credit it takes a few days for the charge to show up on your account.  With debit it shows up right away.  

Answer 3

If you use it as a credit card you will get all the consumer protection that the issuer (mastercard, visa) offers on regular credit cards. With debit you don't get that. I suggest you look at the fine print and see what benefits there are with your card. I always use mine as credit.

Answer 4

credit is more secure debit transmits your pin number which can be intercepted

Answer 5

With a debit purchase the money is immediately transferred out of your account, away from the bank, and to the place of purchase.

With a credit transaction, a few days pass before the money is actually moved out of your account, away from the bank, and to the place of purchase.

This can have several affects for both you and the bank:

The bank is probably recommending credit because the longer they get to keep the money in their hands, the more they can make off of your cash sitting there. If you earn interest on your account, you can also earn a little extra by keeping the cash there longer.

I highly recommend you keep an ongoing register of all your deposits, withdraws, and purchases. However some people choose not to do this and simply check their accounts periodically online to see how much cash they have in the bank. If this is your style you definitely want to use debit transactions to keep you account at precise as possible.

Also, I've never heard of a bank charging interest for using the credit option on your card. While you can use your atm card as a credit purchase it is not a credit card in that you do actually have to have cash in the bank to swipe it and there are not interest fees. I suppose some banks may try to make a quick buck on this, but it is something I've never heard of before.

Answer 6

The use of a credit card is borrowing money

that the bank made available.  The bank pays

a vendor, and you pay the bank back with

interest.

A debit card is used like a check.

The money is taken from your account,

but you don't pay any interest on it.

Answer 7

It's best to use "credit" because if you use it as a debit card you will probably get hit with normal "ATM" fees, usually about $1 per purchase

Answer 8

Also when you use debit some banks charge an additional fee like you are using someone else's ATM.  I always use credit.