Why Choosing Debit or Credit Is Like Picking Salad Dressing


What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Paper or plastic? Low-fat or low-sodium? Window or aisle? Those are the tough questions in life. Today, we'll help you with credit or debit? And maybe ranch or bleu cheese?

What kind of dressing would you like on your salad? For most people, it’s a simple decision. Not me.

Whenever my server asks me that question, I tense up like I’ve just been asked the big question on Who Wants to be A Millionaire. Usually, I struggle to decide if I want ranch or bleu cheese.

This particular time, my server just politely stood there, tapping a pen on her ticket book while I tried to make up my mind. “Well, um, let’s see…”

Meanwhile, on the other side of the table, I looked over at the wife just in time to see her roll her big brown eyes.  After 15 years, she’s used to it.

Choosing debit or credit: Does it really matter?

I bet many  folks get that same deer-in-the-headlights reaction when they run their debit card through a merchant’s card machine at the checkout counter and are confronted with the dreaded “debit or credit?” question.

There’s nothing to be ashamed of. After all, this choice is more complex than ranch or bleu cheese.

Your decision to pay “credit” or “debit” simply tells the bank how you want to process the transaction. Whichever you choose, the money comes directly from the bank account tied to your debit card.

If you choose “debit,” you’re asked to enter a personal identification number (PIN) and the funds are immediately removed from your bank account.

On the other hand, if you choose “credit,” the transaction is verified via your signature and the funds might not be taken from your account until the end of the day – or sometimes even later. That’s because merchants often process these transactions in a “batch mode” with other credit card transactions. That’s it, really.

Now I know what you’re thinking: That’s great, but when I’m using my debit card, what’s the better choice? Credit or debit? Well, it depends.

My reasons for choosing “credit”

Most merchants prefer their customers use the debit option because they pay a smaller fee to the banks when we enter a PIN. Even so, I almost always choose “credit” for the following reasons…

1. More consumer protection. I can take advantage of credit card liability protections and mediation processes, which in my experience have been very pro-consumer.

2. Credit card rewards. More and more debit cards are offering rewards – but only if you select credit.  If you enter your PIN, you can usually kiss those rewards goodbye.

3. Potentially higher transaction limits. To prevent a thief from draining your bank account too quickly, banks usually impose a daily purchase limit. In rare instances, you may be able to get around this limit by choosing credit.

4. More convenience. I conducted a very unscientific experiment and discovered that it takes me an average of 2.1 seconds to enter my PIN but only 1.6 seconds to sign my name. So anytime I can swipe my card without having to enter my PIN, I’m a happy camper.

My only reason for choosing debit

I can think of only one instance for selecting debit over credit – when I need cash back. And although it’s the only reason I ever choose the debit option, it’s a particularly good one because it allows you to avoid those irritating ATM fees.

Meanwhile, back at the restaurant…

Much to my wife’s embarrassment, I continued to hem and haw over the salad dressing until she finally offered me a life line. “Do you want me to choose for you, Len?”  Would I ever!

“Yes, please, Honeybee.  Thank you.”

And with that, the heavy burden of choosing between bleu cheese or ranch was lifted off my shoulders as she quickly ordered for me.

“He’ll have Italian.”

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: What You Should Do — and Not Do — When Meeting a New Dog

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,038 more deals!