Credit Advice

If you do not have adequate balance in your checking account:
- If you use debit method and enter the PIN, bank will deny the transaction
- If you use credit method, bank will most likely accept the transaction and charge you an overdraft fee. If you make multiple transactions, they may charge you a separate overdraft fee for each transaction.

WOW, This was very useful information. Even though you know if there is no money in your account before you tried to use it. LOLOL

Only one additional issue... I use the "Credit" feature of my debit card, because my bank charges a $1.50 fee for using the card as a "debit" (with the exception of the bank-owned ATMs). This charge is across-the-board, and includes merchants. Many merchants will say there is no fee to use your debit card there, however, they are just speaking of THEIR policies. Each bank has it's own fee schedule. Some banks offer the 'debit' feature as a free service, others charge anywhere from $.50 to $2.00 for each transaction.

My bank allows me to use the card as 'credit'. There is no annual fee for me, and no 'per-use' charges.

This can be very confusing, as there are no set standards. I always read the literature I am provided with my cards, and ask LOTS of questions before utilizing new bank features (I'm older and personal banking has really gone through phenomenal changes over the past thirty years).

In addition, you have the right to ask your bank to restrict withdrawals on your card when your balance reaches $0. Some of the banks now say that they will extend this money to you as a "Courtesy". There is NOTHING courteous about incurring overdraft fees to the tune of $35.00 or more, which in some cases will compound daily if not paid.

Although you may be told "NO", the bank branches are often unaware of their ability to stop a check-card transaction when there isn't the available funds. BE PERSISTENT! Have them call their main branch. Or take your business elsewhere.

We are trained as consumers to 'whip out our card' for every transaction. It was a horrifying lesson for my daughter when she made 5 purchases that totaled less than $15 on her card, and was hit with overdraft fees in excess of $200.00!

The bank claimed to have processed the purchases for her to "save her the embarrassment of having her card 'Declined' at check out". The $200.00 quickly turned into $350.00 while my daughter was trying to figure out how to pay off the large debt to her bank when working part time at a local sandwich shop, and going to college full time.

BUYER B E W A R E ! ! !

To the consumer, there are no real differences. In the debit card situation, you are using your pin as authorization. In the credit card situation, you are using your signature. There is no impact on your credit score or report since those are not necessarily credit accounts.

In some instances, there is a difference to the retailer in the amount they are charged from the bank for the transaction. Most merchant credit card agreements will charge the retailer a fixed cost (say $.25) plus a percent of the amount (say 2.5%) for credit card transaction. Debit card transactions are sometimes fixed and therefore can save the retailer money. Retailers may prefer one over the other but the choice is up to you.

It is generally ideal to run your card as credit.  It costs the business more to run credit because they have to pay additional fees to the credit companies to be able to accept credit cards, but the advantage to you is that credit companies are required to eat the cost if your cards are stolen and run as credit, but banks are not required this of debit.  So if someone sees you enter your pin and steals your credit info to run as debit, you may get stuck with the bill.  Banks are required by law not to allow you to overdarft if you make that request with the bank ahead of time, that is regardless of whether you run your card as debit or credit.  Most banks do not charge a debit transaction fee unless you are using the card at a outside ATM machine, in which case the credit choice will not be an option anyway.