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Credit vs. Debit

by | Jul 1, 2019 | News

We’ve all done it. We’re out shopping, ready to use our debit cards, and the sales clerk asks “debit or credit?” We really don’t know what the difference is. It is a debit card, so we say “debit,” right? Wrong.

So save your PIN for ATM use and say “credit” when you’re at the mall, gas station, or grocery store.

How does this benefit YOU?

Instead of giving more money to big corporations, your purchases give money back to the Credit Union. By using your card as credit and lowering Credit Union costs, the Credit Union can now transfer the benefits to you, through lower loan interest rates, higher dividend rates and the ability to offer more products and services.

How has this changed with EMV Chip Cards?

The way a transaction is processed as debit or credit has not changed, but the method of selecting one versus the other has. At Chip enabled terminals you may now see US Debit or Visa Debit as options to run your card. Because each merchant’s terminal is different, we encourage you to ask at the time of purchase, “How do I select credit?”

Merchant pressure

Merchants often encourage consumers to pay with a PIN. Card readers may be programmed to always request a PIN, for example, forcing consumers to take a few seconds longer to push a “credit” button or ask the clerk to enable a signature-based transaction.

While merchants tend to prefer PINs, credit unions and other card issuers usually prefer signature-based purchases. That’s because credit unions are paid a small amount known as an “interchange fee” when members choose the “credit” option for debit card purchase. This helps lower the Credit Union’s costs for offering debit cards to members.

If you have any questions about selecting “credit” vs “debit”, please contact us at 512-452-5211 or

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