Should you swipe your debit card as debit or credit?

Most of us probably have a default that we stick to, but many also probably have no clue what the difference is between the two.

I know I didn’t.

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I used to always swipe my card as credit, because it had a cash-back feature that gave me like 5% back once I’d spent a certain amount every month.

That’s not to be confused with the cash-back option, which allows you to withdraw a limited amount of cash from the register as you pay. For that ATM-like feature, you need to swipe it as debit.

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Ultimately, if you have a debit card, it also doubles as a credit card, and you can do either when you pay.

Swiping as debit issues an immediate transfer of funds, whereas if you swipe your debit card as credit, it will take a few days–just like with a normal credit card. Both methods take the money out of the same linked bank account, and both are contingent on you actually having something close to that amount of money in your account.

So, short-answer: you can do either. In some cases, the merchant may make that choice for you by only allowing for one or the other (usually because of fees they may have to pay for offering the service).

But if you really want to get the most out of your card, you need to look into what features it comes with.

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As I mentioned earlier, I used to have a debit card that gave me a percentage of my money back when I swiped as credit. Some cards will also guarantee your purchased items against theft and/or damage if you scan as credit. So you might want to check that out.

On the other hand, you sometimes might have to pay a fee for using credit, though most of the time the merchant covers it.

Also, some states don’t require a signature under a certain amount when you run the card as credit, and that can make things a bit faster at the register.

Even if the card doesn’t offer any features, you might want to select credit because debit leaves you with a smaller windows to report fraud and less protection when you do.

Make sure you keep an eye on that account balance, because unlike credit cards, which have a longer, (apparently indefinite) fraud reporting window, debit card fraud has to be found and reported within 60 days, and you might only be fully protected beyond $50 if you report it within two days.

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Some debit cards will offer you the same protection as a credit card if you swipe as credit, but many do not.

My current bank registers pending charges almost immediately when I swipe as credit, and then it deducts them from my account shortly after, so it is very similar to debit.

For the most part, it probably makes a bigger difference to the merchant, who often has to pay those pesky fees, than it does to the consumer–but if you want to maximize your benefits, it is totally worth it to look into the details of your specific card.

I did, and it turns out that I am better protected when I swipe credit. So I’m going to go with that from now on.

How about you?

Does your debit card offer benefits for swiping as credit?

Let us know in the comments.

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