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Answering Mail: Using Debit Cards as Credit Cards

This article was written by in Credit. 11 comments.

Every so often I address questions and comments I receive via email or Twitter. If you have a question, please contact me using the form on this page. I try to respond to everyone, but it might take a while before I read every email I receive.

From A. Parker:

What is the difference between the options when a cashier asks you whether you would like to use your debit card as “credit” or “debit?”

Merchants often pay the middlemen between them and banks less for “debit” transactions, which generally require you to enter a PIN. You will likely see merchants, if they show favor between “debit” and “credit” transactions, lead a customer towards “debit.” To use a debit card as “credit,” you are not actually using it like a credit card. Your bank account will still be debited immediately, overnight, or on the next business day. In most cases, you will be required to sign for the transaction rather than entering your PIN, but signature-less credit card transactions are increasingly common.

According to Visa, using a debit card as “credit” helps to ensure you’ll receive the credit card network’s protections like “Zero Liability.” This also ensures that Visa receives a bigger chunk of the merchant’s money.

If you have questions, let us know. You can email your questions directly to me (or to Smithee, Jeff, or Tom) or leave your questions in the comments area.

Updated August 10, 2009 and originally published August 6, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 11 comments… read them below or add one }

avatar Erica Douglass

Many rewards cards only give you rewards if you use them as “credit” (or they give more rewards if you use as credit.) If you have a rewards debit card, make sure to read the fine print to figure this out.


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avatar Luke Landes

Just to clarify, credit cards, including those that offer rewards, are always used in “credit” (signature) mode. Debit cards, which if they carry a Visa or Mastercard logo, including thise that offer rewards, can be used in “debit” (PIN) or “credit” mode. Some debit cards offer different levels of rewards depending on the purchase mode.

For example Citibank offers rewards when you use their debit card, linked to their ThankYou network, at the rate of 1 point per $2 if you use “crdit” mode but only at the rate of 1 point per $3 if you use “debit” mode.

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avatar Jason

Some banks (I’m looking at you, Wachovia) will charge you for debit transactions. Check your cardholder agreement and monthly statements.

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avatar MyJourney

I always use the debit option at small businesses. Mainly because I feel bad they are getting hit with higher fees.

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avatar Barb

My bank also charges me a quarter for every debit transaction, so I always use my debit card in credit mode. If you want to save businesses money, don’t use AmEx; their fees are insane.

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avatar SingleGuyMoney

And don’t forget, if you have one of the “high yield” reward checking accounts, one of the requirements is usually 10-15 credit transactions. Debit transactions usually don’t count toward the monthly requirement. Make sure you meet your minimum amount of credit transactions before you let the cashier run your transaction as debit.

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avatar LaDonna

Chase offers 3% back on groceries & gas if you use your debit card as a credit card. Everywhere else, I use it as debit to help the business owners.

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avatar Laura

I’m hoping I’ll get my debit card from Chase soon. Do they charge you fees for debit transactions?

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avatar Francis


long time reader and I’ve noticed that this question comes up a lot. It seems though that it is only the commenters that are bringing up the fact that using the “charge” mode of any card whether it be a card linked to a checking account or credit account will result in higher fees charged to the merchant ( about 2-5% ). for a small businesses these fees can add up! please remind the readers of this hidden cost of credit card transactions!

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avatar Luke Landes

Hey Francis: The first sentence of my response to the question, in the text of the article, says that merchants pay less for debit (PIN) transactions than credit (signature) transactions, even when using a debit card. That’s why better debit card rewards often require the transaction to be in credit (signature) mode. Merchants might pay 2% to 3% of the total cost for a credit transaction while ten cents or less for a debit card transaction.

Regular credit cards are almost never used in debit (PIN) mode.

These merchant fees are often passed onto the consumer in the form of higher prices for everyone.

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avatar rita


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