Little known facts about your debit card.
You have a debit card that can be used as a credit card. Have you ever wondered if there is a difference in the usage of this card for debit or credit purchases? Read on and you will discover there is a difference sometimes.
When checking out at the register the cashier will ask if it is credit or debit. Perhaps you do not really see that there is a difference in this since the money comes directly out of your checking account either way. Well that decision to debit, using your PIN number or credit by signature can effect your bank charges.
When using the debit card, where you do enter your PIN merchants pay a flat fee to process that transaction. If you pay by credit, using your signature then the bank can and does charge a percentage (usually 2.49% of the total transaction). The bank makes more of a profit on the credit transaction.
What about you the customer? When using your debit card some banks will charge 25-50 cents per transaction or perhaps some will charge a monthly fee. The average monthly fee is $1-2.00. Whether you’ll pay a fee depends on where you live, the bank you use and even the kind of account you have.
Of the largest U.S. banks only two charge POS (point of sale) fees. They are Wells Fargo which assesses a $1 POS fee every month during which you use your PIN to make check-card purchases and U.S. Bancorp which charges a 25-cent fee for every PIN purchase if you live in Colorado, Indiana, Kentucky or Ohio (no charge for Electronic Transfer Accounts or Student Checking).
Some banks offer rewards. Again there are rules and regulations as to how the rewards add up and they vary per bank. Some will give rewards for charge purchases only and nothing for the debit purchase. Your mother was right on this one, it does pay to read the fine print.
Hopefully now you can see the difference when using your bank card as a credit or debit card. Some of you may not be effect of these, but it is information that could help you save a few dollars here and there.
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