Debit or Credit - Comparison Summary Chart


	Debit or Credit - Comparison Summary How To Pay Using A Debit Card
	This page compares the two payment options available using a debit card. The advantages and disadvantages of specifying debit or credit are compared.		*Vaughn's Summaries* *Economics Summaries* Bad Collection Agency - NCO Best Banks Calif. Auto Insurance Calif. Health Insurance Checking Accounts Credit Card Offers Credit Reports Debit or Credit? Gold Coins Investment Postal Rates Savings Accounts Social Security Payments
30	540-860	30	260

	Debit Card How to Pay - Debit or Credit		True Credit Card
	DEBIT	. CREDIT	True Credit Card
Type of Transaction	Pin Number	Signature	Signature
Acceptance	May be refused (car rental companies)	More acceptable	Most acceptable
Annual Fee	none	none	May be substantial
ATM Denial Fees	Typically $1.50	n.a.	n.a.
ATM Foreign Fees	Typically $ 2.00	n.a.	n.a.
ATM Surcharge Fees	Typically $1.50	n.a.	n.a.
Blocking	Some vendors may "lock up" your funds, far beyond the purchase price, and not release them until days later - this can result in overdrafts.	The same may be true, if you specify "credit" on your debit card.	Not a factor, unless you are close to your credit limit.
Credit Score	No effect	Credit card payments affect FICO score.	Credit card payments affect FICO score.
Disputes	Less legal protection	Stronger legal protection	Strongest legal protection
Interchange Fees (Typical Bank Fee Charged to Merchant)	$ 0.20 (merchant preferred)	Averages 1.4% $ 1.40 (bank preferred) for $100 transaction	Averages 2% $ 2.00 (bank preferred) for $100 transaction
Interest Rate	none	none	12% to 79.9%
Overcharges	Big hassle to reverse*	Easier to correct	Easiest to correct
Overdraft	High fees, typically $35 (a huge source of income for banks)	n.a.	n.a.
POS Fees	A Point-Of-Sale fee may be charged	No POS fees	No POS fees
Rewards	Perhaps 1/4 as generous	More generous	Most generous
Security	Pin number is not secure - Every use creates added risk.	Much more secure	Most secure
Theft of Card	No "capped" protection Up to $500 if not reported within 2 business days	Fraudulent charges capped at $ 50	Fraudulent charges capped at $ 50

When Money Is Removed	Immediately	Several days	Two to 30 days Depends upon billing cycle
	* I had this problem. I was paying an auto repair bill using debit, when the mechanic suddenly stopped the transaction while it was going through, because he noticed that he had omitted a charge. The money was GRABBED from my account, but WAS NOT credited to his account. I ended up being charged TWICE. It was a huge hassle to get the bank to credit my account.
150	200-750	200	200

Disclaimer
The author is not perfect. Errors can and do occur.
All reported errors will be corrected, upon verification.
Carefully read the terms of service of your debit card provider.

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This Vaughns Debit or Credit payment web page was updated on 2010-03-16.