The Difference Between Debit Cards and Credit Cards - Recent studies have shown that consumers are using debit cards at an increased rate over credit cards in the United States. Most people understand the basic differences in the two financial payment cards, but here are some important differences:
- If you chose debit at the Point Of Sale (POS) and enter in your four-digit pin number, the transaction clears your debit card account immediately, similar to a cash withdrawal at an ATM machine. If you chose credit with a debit card or use a credit card, that transaction clears depending on the merchant, usually within 2 days of the purchase.
- Merchants prefer debit card transactions, as the funds hit their bank account quicker than credit card transactions
- Both debit card and credit card transactions are covered by Visa or MasterCard’s liability programs, covering any fraudulent or unauthorized transactions.
- Debit cards do not require a credit score for acceptance of a card or approval for a line of credit, while credit cards require you to be in good financial standing.
- Debit cards only allow you to spend what is pre-deposited into your account, whether it is a prepaid debit card account or a debit card connected to a bank account.
Debit cards are a logical way to enjoy the global merchant acceptance of credit cards without having to worry about falling into debt. |
