Debit or Credit?

When you make a purchase using your debit card, you’re often given the choice between “debit” or “credit.” What’s the difference between the two?

When you select “debit” on the card reader and enter your PIN (Personal Identification Number), an online transaction begins. The money is immediately deducted from your account and sent to the merchant. In most cases, you are also allowed to withdraw cash along with making the purchase.

When you select “credit” with your debit card, an offline transaction is initiated. In the past, you were asked for a signature to complete your purchase, but with improved security of today’s EMV chip cards, a signature may not be needed. A hold is placed on the money while the transaction is sent through the credit card processing network, which can take 2-3 days to complete. A credit transaction does not allow you to withdraw money along with the purchase.

So, in a nutshell, here are the differences between the two kinds of transactions:

Debit transaction

  • Uses a PIN to complete the transaction.
  • Hits your account immediately, making it easier for you to know in real time how much is left in your account.
  • Allows you to withdraw cash.

Credit transaction

  • Doesn’t ask for a PIN but may ask for a signature to complete the transaction.
  • Can take 2-3 days for the transaction to appear in your account.
  • Does not allow you to withdraw cash.


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