Using your credit union Visa check card from Personal Care America Federal Credit Union almost anywhere prompts the question, debit or credit?  Does it really matter how you answer the question?  It might.

Let’s start at the ATM, no problem, your must use your pin for the transaction so it is a debit transaction.

How about internet or phone purchases?  Again there is no issue because all transactions where the card isn’t present must be considered a credit purchase.

Now comes the fun part; you are at a store or buying gas which should you choose?  There really are two answers depending on what you need to do.  If you want cash back you need to choose debit and use your pin.

No cash back?  Now you have your choice of either credit or debit so which one is best?  Generally you are better protected by choosing credit and signing for the transaction.  There are two reasons for this: first you have less chance of someone “stealing” your pin number and secondly you have more recourse available to you for unauthorized transactions.  Both Visa and MasterCard assume that a person using your card with your pin number has your permission to use the card so you then assume the liability for any fraudulent charges.  If you sign for the transaction (credit) Visa or MasterCard take on the liability. 

Both card providers charge the merchant for the right to process your transaction but because of the liability issue they charge more for a credit transaction than they do for a debit.  The merchant wants you to use the card as debit because they make more on the sale, but you do have a choice.  If the screen comes up asking for a pin number even though you chose credit, simply tell the cashier that your transaction is credit and they will be able to process it accordingly.

Remember though, that regardless of the method you use, the transaction is coming out of your share draft (checking) account and you need to have the funds on deposit and available.  Under certain circumstances it is still possible for your transaction to be put through by the merchant without an authorization from the credit union.  If you aren't careful this may result in an over draft situation.  You should also remember that most merchants place a hold on your account until the transaction clears, so be sure you know what your available balance is prior to using your card.  We’ll discuss how the holds work in another edition.

Should you choose credit or debit?  Usually you are better off with credit but the choice is yours. As always, remember,

It’s Only Money

John