Credit vs. Debit

Credit vs. Debit

Credit vs. Debit

When signing up for a personal checking account, most often it is accompanied with a debit card to access your funds. These debit cards are convenient and can be lifesavers when there is no time to stop by the ATM to take out cash. These cards typically have a VISA or Mastercard logo and can also be used as credit. But what’s the difference? Why use credit vs. debit?

Both cards are tied to your account. Debit purchases remove the funds right away, while credit purchases can sometimes cause a hold to be placed on the card. This is especially true when purchasing gas by using your debit card as credit. Using a credit, you will typically see a dollar hold on your account. However if you chose to pay for gas by using your card as a debit, you will see the money is removed right away. Using credit, the funds can typically take anywhere between 2-3 business days to reflect in your account balance. The pro of using debit over credit is that you will have a more accurate balance and representation of how much money is in your account. This can help if you are concerned with overdrafting and avoiding any overdraft fees.

For online purchases with your debit card, it is processed as credit. This option is safer as you are not entering your pin number at checkout. This also gives you added protection in case the site you are shopping on is not secure or is compromised. See our blog post on protecting yourself online for more safe online shopping tips. When using your debit card as credit, it is important to remember there is a 2-3 day turnaround for the money to be removed from your account, so it is best to keep a record of all purchases made. Remember both are tied to your checking account and using your debit card as credit will not affect your credit score.

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