For example, when I place an order on the phone or on a web site, they always say 'What is your credit card number?' It's like they assume I only have a credit card when in reality I have a debit card. I know that debit cards can be charged as credits, and the merchant has to manually collect the funds and pay a fee. The money still ends up being taken from your account, but it will take up to a day or two.
Because many debit cards swing both ways
Behind the curtain, on the merchant side, there are two fundamentally different ways to run a charge.
- As a credit card transaction: with a signature (in the US), cashback not allowed, about 3% merchant costs +-, somewhat better consumer protection, and transaction fees never on you.
- As an ATM/debit card transaction: with a PIN, cashback permitted, about 1% merchant costs +-, worse consumer protection, and transaction fees sometimes on you.
ATM cards capable of doing both have a major credit card logo on them, such as Visa or Mastercard. If you beg and wheedle your bank, you can get them to send you a plain ATM card without a Visa/MC logo, that is not able to run as credit.
It is very different for the merchant, and lots and lots of merchants are not set up for ATM cards. That's why the "credit card mode" on debit cards is such a big deal, it works at car rentals, pizza places, the Renaissance Faire... Of course all these subtle distinctions are invisible to you, which means the bank product managers all did their jobs well.
Heck, if you can fog a mirror and have a Social Security number that isn't blacklisted, you can be a credit card merchant, from outfits like Square. You sure can't say that about an ATM account.
I did mention consumer protection.
ATM-card mode is basically designed to be like writing a check, which has virtually no consumer protections at all if you get ripped off.
Credit card mode on an ATM card has very limited consumer protection, because VISA required this to use the network. In this case, they must accept credit card like disputes, but they keep your money until it's resolved, and it's not an auto-win.
Real credit cards have much better consumer protection. In that case you do not need to pay the charge until your dispute fails, and the threshold is much more in your favor. Visa and Mastercard get a lot of market pressure from American Express, whose liberal dispute policy all but guarantees your dispute will succeed.
If you want to reduce potential ripoffs, and especially if you are living hand to mouth emptying your bank account most months (don't do that), then do not use debit at all. Use real credit cards and pay 'em off every month. With debit cards "credit mode" is too vulnerable: a waitress steals your card numbers, merchant double charges you, any other kind of fraud, PIFF a bunch of money disappears from your bank account and now you're up the creek.