Credit Cards vs. Debit Cards

[PBS Poll-435]

Credit cards are issued by banks and other financial institutions and tied to a line of credit. They are swiped at POS and the cardholder may be allowed to receive cash at ATMS using a pin or at banks that offer cash advances(usually at a MUCH higher interest rate.) "Rewards" offered by the issuing institution are charged as fees to the merchant who initiated the transaction. (3%+)

Debit Cards are linked to a deposit account at a financial institution. Because not all ATM networks (STAR, Cirrus, Pulse, etc.) "talked" to each other across the country, Visa and Mastercard started branding debit cards with their logos so that debit cards could be swiped at POS and treated like "credit" cards.

This transaction would be treated like any other credit card interchange, and the merchant fees would be treated similarly.

Using a "debit" card in a transaction with a PIN# benefits the merchant because the fees are MUCH lower (usually $.25 and a flat fee.) Typically the effective cost to the merchant is less than 1.5% of the transaction. However, because this can be construed as an ATM-like transaction, the consumer may be responsible for an ATM fee by their institution. And, typically, there are not "Rewards" associated with PIN-based transactions.

Give your $ to your bank or to Mastercard or Visa. Your pick, I guess.

[Skink]

1. It's all socialist anyway.

got that one percenters?

[Shandris]

2. At least around here, that's pretty outdated data.

I can't think of a bank - even a chain - that doesn't have a Rewards program of some kind, and/or one that charges ATM fees for using it as a Debit Card at a merchant. Now, they DO still charge ATM fees to use the ATM (some do, at least; not all) plus the ATM's owner bank will assess a fee one way or another, but this is simply for withdrawing cash. Nominally, something you won't hardly ever need to do anymore.

Again, anecdotal evidence from central Indiana, may or may not be accurate in your area.

Credit Cards, OTOH...I'll consider those a scam until the day I die.

[PBS Poll-435]

3. The point is that the card must be swiped and it's MCV logo is used

Debit cards with PIN-based transactions don't get rewards around these parts.

And the customer might be assessed an "ATM" fee for buying a pack of cigarettes at the convenience store by using the card as a true "debit".

[Shandris]

7. Interesting. Might be something thats dependant on the part of the...

...country.

I couldn't live without mine, but that's because there are no fees -- for anything (except ATM usage at the machine itself). I wouldn't give it a second look if they charged me based on how it's processed though, those little things add up quickly.

[Imagevision]

4. I have 0 charges for using my debit card - you have to find the right banks

[PBS Poll-435]

5. Do you use PIN-based or "swiped" transactions?

:shrug:

[Shandris]

6. Wrong response place, sorry. (n/t)

[PBS Poll-435]

8. No prob

It is always assumed that "debit" cards are using the PIN device rather than being swiped like an ordinary credit card. The money still comes out of your bank account but it is the method.