Posts Tagged ‘debit cards. credit cards. PIN transactions’

When to Say “Debit” or “Credit”

applestoorangesWhen your PFCU ATM card has a VISA® logo on it, it is referred to as a “Debit Card”. The money comes out of your PFCU Checking account and not a line of credit attached to the card (Unless you have a PFCU Overdraft Line-of-Credit, which will kick in if you run short on funds.) An actual Credit Card is a loan with specific terms, interest rates, and fees, which you can access as-needed by using your plastic card. Here is where the terms “Debit” and “Credit” can get confusing, though. It’s not quite apples and oranges. When using their PFCU Debit Cards, members are often asked “Debit or Credit”? While the transaction goes through either way, one requires a PIN and the other a signature. An actual Credit Card is always processed as a “Credit” transaction and is usually processed using a signature rather than a PIN. A Debit Card can be processed as “Debit” or “Credit”. Choosing “Credit” can bring you extra protections on your purchases, such as a greater ability to return items. Remember, though, that places like hotels, gas stations and rental car companies may place a security hold on a good portion of your funds, which can tie up your checking account for days. For this type of transaction, an actual Credit Card is usually best. Also, when you are traveling, it is good to use your PIN a few times in a new area to establish that you are there. Our stringent security system sees signature-based transactions in a geographical area where you don’t usually transact as red flags. You can also call us at (626) 799-0882 to let us know you will be traveling. We’ll note your account for our security team.

So, even though you might choose “Credit” when completing a Debit Card transaction, you are really only choosing to have VISA® process it rather than the ATM network. See a companion article “Millenials Rethink Credit Vs. Debit” for another angle to this discussion.