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Using Debit Card as Credit

Updated January 12, 2021   |   4 min. read

Christine DiGangi

 Christine DiGangi is the former Deputy Managing Editor - Engageme... Read More
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While you can use a debit card to pay for almost all the things you would use a credit card for, these cards aren’t the same type of thing. A debit card is tied to existing money, either prepaid on the card itself or in your savings or checking account. A credit card lets you make purchases on credit, and you won’t be able to do this with a debit card.

Can You Use Your Debit Card as Credit?

When you pay at the register, you’re often asked whether you’re making a debit or credit payment. This isn’t a question about whether you’re paying with existing checking account funds or if you’ll be borrowing the money from a credit card lender. It’s a question about how you want the payment processed. And most of the time, yes, you can use your debit card as credit at check out.

What Happens When You Use a Debit Card as Credit?

When make a purchase and select to process your payment as credit, it’s an offline transaction. “The funds for offline transactions are deducted after the merchant settles the purchase with the credit card processor and typically take 2-3 days to be reflected in your account balance,” MasterCard says.

According to MasterCard, when you use a debit card and your PIN (personal identification number), the transaction is completed in real time. That’s also known as an online transaction— you authorize the purchase with your PIN, and the money is immediately transferred from your bank account to the merchant. These are debit card transactions.

But in reality, the difference between debit and credit transactions have little real impact on your bottom line. There may be some differences in fees paid by the retailer or processor, but those fees are rarely passed on to the consumer directly.

Some individuals choose to use their debit cards as credit at the register to avoid having to enter their PIN. It’s commonly believed that this creates some additional security against someone learning that number and having one more piece of information to support credit card fraud.

While you certainly want to protect your PIN, simply being aware of who is around you and keeping the keypad covered during debit transactions can help keep you secure if you do decide to pay this way. It may seem like an unnecessary precaution, but you can never be too careful when it comes to debit card fraud.

Can I Use My Debit Card if I Have No Money?

One thing that’s important to note is that you can’t usually use your debit card for credit. If you are short on cash, your credit card still works if you have available credit on it. If there’s no money in your bank account, your debit card may get declined when you attempt to pay. So make sure there’s cash in your bank account anytime you use your debit card.

There’s one exception to this rule. Some banks offer overdraft protection. If you qualify for this protection, the bank covers your charges up to a certain amount and you simply rectify the situation later. That way, you avoid potentially embarrassing declines — for a cost in overdraft fees, which can be $15 to $30 per overdraft.

Can I Use My Debit Card as Credit at Walmart?

Whether or not you can choose to pay as credit with a debit card depends on each retailer and payment system setup. Many Walmart payment systems are set up to allow this, but they default to debit. When this happens, tell the cashier you want to pay as credit or select the option for changing payment method and choose to pay as credit and sign for your purchases instead of entering your PIN.

Does Using My Debit Card Build Credit?

Paying with your debit card doesn’t really impact your credit score, regardless of the payment type you select. That’s because your debit card is simply a stand-in for money you actually have on hand (or in the bank). It’s not credit and doesn’t provide any type of illustration of your likelihood of making payments in a timely manner or using credit responsibly. Therefore, it won’t impact your credit history.

If you use your debit card to overdraw your bank account on a regular basis or do so and leave the negative balance long-term, it could negatively impact your credit score. Banks do report checking and savings details like this to the credit bureaus.

The Bottom Line on Debit Cards as Credit Cards

Whether you use your debit card as credit or debit, the funds will still be withdrawn from your checking account. You can use your debit card to make a payment processed as credit, but you can’t use your debit card for credit in most cases. And even when you can, it’s via the limited fail-safe of overdraft protection, which is not meant for regular use and can be quite expensive.

Debit cards are wonderful money-management tools that provide a lot of modern convenience. But for many people, it’s a good idea to have at least one credit card in your wallet too for those times when debit just doesn’t quite cut it. Just make sure to check your credit score, understand how credit cards work and apply for the card that provides you the best perks at the lowest cost.

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