Home > Personal Finance > What Happens If I Swipe My Debit Card as ‘Credit’?

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It’s a question we’ve all heard when shopping: “Credit or debit?” It seems straightforward, just the cashier asking you what type of payment card you’re using, but there’s actually a lot more history to that question than you might think.

Debit and credit transactions are processed differently: Here’s how MasterCard explained it in an emailed statement to Credit.com: When you use a debit card and your PIN (personal identification number), the transaction is completed in real time, also known as an online transaction — you authorize the purchase with your PIN and the money is immediately transferred from your bank account to the merchant. With a credit card, or using a debit card as credit, it’s an offline transaction.

“The funds for offline transactions are deducted after the merchant settles the purchase with the credit card processor and typically take 2-3 days to be reflected in your account balance,” MasterCard says.

Issuers used to charge merchants different fees for accepting credit cards than for accepting debit card transactions with a PIN. Before the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed, Sen. Dick Durbin added a provision, now called the Durbin Amendment, that restricted interchange fees to 12 cents per transaction. By the time the bill was signed into law, the cap was set at 21 cents, much lower than the previous average of 45 cents per transaction. (On Jan. 20, the Supreme Court declined to hear retailers’ challenge to that 21-cent cap.)

With the cap on interchange fees, banks saw their revenue source for things like debit card rewards and free banking dry up, which is why you’re unlikely to find those things these days.

“There’s several thousand community banks and credit unions, what the act refers to as unregulated, who can actually charge greater interchange on transactions,” said Nick Barnes senior vice president of retail banking at ACI Worldwide, a payments system company. The Durbin Amendment only impacted financial service providers with $10 billion or more in assets. “That’s why you go to these tiny banks you’ll still see free banking and debit rewards.”

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Should You Choose Debit or Credit?

Credit cards and debit cards are very different products, each with their own advantages and drawbacks that should influence when and how you use them. As for hitting the “credit” button when you’re using a debit card: It doesn’t really matter.

Other than the changes banks may have made as a result changing interchange fees, choosing to use a debit card as credit doesn’t really impact you. You often have the choice to use your debit card with or without the PIN, and how you use it is a matter of personal preference. Running a debit card as an offline transaction still ends up doing the same thing — taking money from your checking account — and it doesn’t help you build credit, like using a credit card does. (If you’re trying to build good credit, you can track your progress with our free credit report snapshot. It includes two of your credit scores, and updates are available every 30 days.)

Image: iStock

This article was updated on Jan. 23, 2017.

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  • kt

    Also when you choose credit you can see the name of the vendor. When you use debit you may only see the address….

  • http://www.credit.com/ Credit.com Credit Experts

    Not necessarily. The laws governing them are different — you have far less time to report a debit card lost or stolen, for example. Here’s more:

    Do You Know the Differences Between Credit & Debit Cards?

  • Cristastic

    But you share your zip code, which is required and also information co-related to the transaction. Isn’t that the equivalent of using a PIN#?

    • JC

      So if I give you my card and ZIP code you can get money from an ATM?

      Besides, when I swipe my debit card and choose “credit” very, very few places ask for ZIP code.

      • Cristastic

        “So if I give you my card and ZIP code you can get money from an ATM?”

        Silly question.

        The whole premise of the article was stating the advantages and disadvantages of using debit vs. credit. My question was related to purchases using your card as a credit card (for instance paying at the pump) where you are prompted to enter in your zip code as an identifier. Obviously, if you are not prompted to give this information, this is not your problem.

      • Cristastic

        “So if I give you my card and ZIP code you can get money from an ATM?”

        Depends. Is your PIN number the same as your zip code?

  • tessa

    My bank charges me for swipes using my pin. If i choose to run it as credit i can avoid those charges.

  • Deb

    So then, are you saying, to help build credit a person should use thrie debit card as a credit card?

    • http://www.credit.com/ Credit.com Credit Experts

      No; using a debit card, regardless of whether you run it as credit, will not affect your credit score.

  • Leah

    I don’t get interest on my checking account unless I have 15 “credit” purchases each month. I get nothing if I use the pin. I don’t do business with anyone who only accepts debit card transactions – no benefit for me there!

  • Brian7262784671

    nah people run their debit cards as credit because they want people to believe they have good credit and they look “co000000l” by saying “credit”

  • Kristy

    Help??? Can someone answer this question for me. Say I went to McDonalds or Stayed in a hotel and they slide my card as a credit. Does that automatically subtract money from your account??

    • http://www.Credit.com/ Gerri Detweiler

      As the article states it’s considered an “offline” transaction and how quickly it will subtract that balance from your account depends on how quickly it is processed. (With hotels they often place a hold on the account first.)

  • Cristastic

    You need to re-read this entire thread from the beginning. Your comment should be directed at JC, not me.

    • mikey

      OK, I re-read it from the beginning. I thought I understood your point reasonably well, but I could be wrong. To summarize, as I understand it:

      – David Shipper begins by stating that by selecting ‘credit’ instead of ‘debit’, you don’t have enter your PIN number. This is better because, if the merchant’s system is compromised (as we’ve seen more and more frequently), the PIN number is not included in the compromised data. The practical upshot of this (as David points out) is that whoever has stolen the card data cannot make ATM withdrawals, as they require the PIN number.

      – You point out that some ‘credit’ transactions require a ZIP code to process. Presumably, you are saying that in the case of the merchant’s system being compromised, whoever has stolen the card data would get your ZIP code. Your question, as I understand it, is this: “why is it better that they get my ZIP code than my PIN number?”

      – JC says “So if I give you my card and ZIP code you can get money from an ATM?”, which is actually the answer to your question: your ZIP code can’t be used in conjunction with your ATM card to withdraw money.

      Anyway, that’s how I read it. I’m not trying to be a jerk or offend you, but trying to offer an answer to your question.

      • Cristastic

        Nope. But thanks for taking the time to reply.

  • mike

    hi,if i selet the credit feature can i still get cash over purchase

    • http://www.Credit.com/ Gerri Detweiler

      You have to choose debit to get cash back.

  • https://www.pinterest.com/elysianheart15/ ElysianHeart 15

    For online payments, can I click the ‘credit’ option for my debit card?

    • http://www.Credit.com/ Gerri Detweiler

      Yes. But keep in mind debit cards don’t carry the same protections credit cards do. If there is a problem with the purchase you can’t request a chargeback like you can with a credit card.

  • Drill

    Please help So what if I don’t have any money in my checking account can I still use the credit part instead of debit

    • Jeanine Skowronski

      Debit cards generally get denied when you run out of funds in your checking account, as they are not a line of credit. However, if you have overdraft coverage, the charge may go through … and you may incur steep fees until you address the overdraft.



  • Ai Yamaguchi

    Thank you so much for this very clear explanation. I’ve been asking questions eversince I started using my debit card. There are times when I use my card for a transaction and dosen’t need a PIN. And other times it’s the other way around.. definitely using the option “credit” from now on, just to be safe. Very helpful article! Kudos!

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