Debit vs. Credit: The great debate

What’s the difference between debit and credit at the checkout line?

When you swipe your card at the checkout, the cashier asks, “Is that debit or credit?” If you select “debit”, you will need to key in your Personal Identification Number, or PIN. If you select “credit”, you will need to sign the sales slip.

Any time you use your card with the PIN, it is considered an “online” transaction and the funds are deducted from your account immediately. A PIN transaction can be done through a merchant’s credit card terminal or Point-of-Sale (POS) software system with an attached pin pad.

A "credit" transaction requires a signature and is considered an “offline” transaction. That means that the funds are not deducted from your account until the merchant settles the purchase with their card processor. While you may see the transaction appear as having been authorized, the posting of the purchase may take one to three days. Even though you have selected “credit”, your purchase amount is still deducted from your checking account.

Why select “credit”?

A signature transaction has more protection from VISA® than a PIN based transaction. VISA has a zero liability policy that protects customers if your account is in good standing, you have exercised ‘reasonable care’ and you haven’t reported an excessive amount of unauthorized events.