While many people just fly through the line at the store and purchase their items, some people stop and wonder if they should pick debit or credit when they put their bank card in the slot. If this has happened to you and you are still unaware of the difference, then the answer is simple, how do you want the transaction to go?

Debit Vs. Credit

The solution to your question is based on how your budgeting plans are set. For example, If you are on a set budget plan and know what you have in your account, then choosing debit may be a better option. However, if you do not mind waiting for the transaction to clear in your bank instantly, then choosing credit, is a better option. To sum up the differences between the two is really based on the transaction time, or if you need cash back. Business Insider states, “Both methods keep an electronic record of your purchases, allowing you to more easily track your spending, see where your money goes, and even stick to a budget.”

Debit Choice:

  • Immediately withdrawals the amount from your account
  • The merchant or store you are buying your items from is charged a lower amount for the transaction
  • Cashback options are available
  • You have to put in your PIN
  • Forbes expresses, “It’s true, paying with a debit card is a more fiscally sound and responsible thing to do.”

Credit Choice:

  • The amount spent takes a few days to be posted officially in your account
  • You will have to sign for the transaction
  • The merchant will pay a higher amount for your transaction
  • Cashback options are not available

Confusions Of Debit Vs. Credit

Using your bank card as a debit or credit determines how fast the transaction will be posted to your account, meaning if the funds will be held for a few days or not. Some people think that their banking card used as a credit card is just like a regular credit card. This fact is farthest from the truth. In reality, the bank card does not report to credit agencies, but a real credit card will. In addition, a credit card is a method to pay for all your transactions at the end of the month, verses in a few days with a bank card.

Other common concerns are refunds and chargebacks. If you have inquired, “what is a chargeback?” then to clear the air wikipedia states, “Chargeback is the return of funds to a consumer, initiated by the issuing bank of the instrument used by a consumer to settle a debt. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer’s bank account, line of credit, or credit card.” Overall, a chargeback is a way to help with customer protection of purchases.

For example, if you go into a store and buy a product and later found it was damaged. You then take the item back to the store for a refund, and the merchant or you call your bank and they will issue a chargeback, which will pull the funds that were spent and bring them back to your account, as long as the claim was valid. Another example would be if you bought three items, and only two showed up, then you can make a chargeback claim to recover the funds.

Final Thoughts

In conclusion, the confusion between deciding to use credit or debit at the checkout line solely depends on your budgeting plans. If you want to immediately get the money taken from your bank account, use debit, if you don’t mind waiting a few days for the transaction to post, then consider credit. Both options are solid, and both options allow for chargeback, however, one may be faster over the other in the long run. Therefore, base your decision off of your financial situation, and you will not ever have to question the concern again.