I've been advised to (and have been) running my normal debit card transactions as "credit" transactions. What does this mean in terms of my security, the time a charge takes to settle, and the fees for the vendor?

  • I've tagged this united-states. Debit card transactions in Canada (Interac Direct Payment), for instance, don't work the same way as implied in this question and its answers. See en.wikipedia.org/wiki/Interac Nov 13, 2010 at 23:09

5 Answers 5


A "credit" transaction runs through Visa/Mastercard. The transaction settlement varies by merchant and the merchant pays a 2-4% fee, depending on their arrangement with the processor and your card. You are covered by the various insurance, consumer protection and other programs associated with your card.

A "debit" transaction is secured using your PIN and settles immediately. The cost to the merchant is typically $0.10-0.50 per transaction. You are not covered by benefits provided by Visa/Mastercard and have minimal fraud protection if your PIN is compromised.

In terms of security, debit is probably the most secure option, as it is PIN-secured. But... credit transactions limit your liability to $50 by law, and some issuers have $0 liability policies. The catch there is that it is up to you to detect and report fraudulent transactions in a timely manner.

I've always been puzzled by folks who use a debit card in credit mode. Other than exposing you to more risk and imposing some self-control on you, I can't see a reason to use a debit card in credit mode over a credit card.

  • I use a debit in credit mode all the time for the cash back my institution offers (1.5%)
    – warren
    Nov 9, 2010 at 13:31
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    Limited liability is the big reason at my house. If you don't use your pin in public, it's much less likely to get compromised.
    – C. Ross
    Nov 9, 2010 at 15:39
  • Quick note about Fraud protection... it's not that you aren't covered by any when you use debit, it's that Credit transactions have certain protections mandated by law. Debit transactions are governed by your financial institutions' policies. The bank I work for, for instance, offers the same protection for our customers via either method (and I believe many of the "big box" banks do as well). Nov 16, 2010 at 17:50
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    @C. Ross +1 Every time you use your pinin public is another chance for someone to find out what it is. Don't forget that ID is almost never checked for a pin transaction, this is great for the crook if they know your pin. Jul 15, 2011 at 3:37
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    A debit card is one that takes money directly out of your bank account; it 'debits' your bank account. A credit card gives you credit - a loan - temporarily to be paid at the end of the month. What people call a debit card is really an ATM card.
    – Mei
    Jul 27, 2014 at 1:02

There are two approval networks for a debit card transaction.

The "credit" side is processed through visa or mastercard (whichever matches your debit card). There can be a lag before the transaction is settled and shows up on your bank statement. I believe that during the time, the charge is shown to the bank as "pending". The term credit refers to the approval network and this is still a debit transaction against your checking account.

The "debit" side is processed through one of the atm networks (plus, etc.) and will show up on your account very quickly, similar to how fast an atm withdrawal will process. A debit transaction requires you to use your pin number. This is the cheaper route for the vendor. Some local grocery stores around here also let you take out extra cash if you use debit so you can pay for $6 of groceries with a $46 debit transaction and leave with $40 cash.


The main reason I charge me normal debit card transactions as "credit" transactions is for the points. If I process it as a debit transaction I don't get these bonus points. Also, because my debit card is associated with Visa I can use it where a credit card is needed. For example, I believe reserving a hotel room with a debit card associated with a credit company is easier than with just a plain debit card.


In my case, I do it for frequent flyer mileage. Let's not forget that many banks charge a small fee every time you use it as debit, generally it shows on your statement as a "POS charge" usually around .50. These POS charges can add up quickly and if you're debiting for a $2.00 cup of coffee, it now costs you $2.50 (a 25% penalty for using it as debit). Best to use it as debit if you want to get cash back, then the .50 charge is quite a bargain compared to going to an out of network where you'll get charged at least 2.00.


You are not charged anything to use your card as debit unless you are, say, paying a light bill, etc. and they charge a convenience fee. The merchant is charged a fee, not the consumer, so that $2 cup of coffee- still $2

  • This is wrong... my bank charges a small fee if I use my card as "Debit" (with PIN). The fee is either $0.30 or $0.50 per transaction, I don't remember which because I never use it as "Debit", only as "Credit". Their justification is that when using it as "Debit", I can get cash back, and if I went to an ATM of another bank for cash, it would cost me a few dollars, therefore I should feel grateful to get it for their small fee. So, basically, they charge the fee because they can. As I said, I don't use it, so perhaps things have changed and they don't (or can't) charge it any more. Jun 23, 2015 at 9:45

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