Situation: My debit card was cracking in half, so I asked my bank for a new one. It is supposed to arrive today. On Wednesday, my PIN for my existing card no longer was recognised. I assume the bank deactivated that card because they had issued a new one, although my account # is the same.
While stuck at the checkout in the grocery store, the clerk advised me to use the card as a credit card instead. I tried it and it worked, no problem, I just had to sign the slip instead of just taking my receipt and leaving.
So what have I just done? I have plenty of money in my account - does it just pull from that or have I opened a new account that is accruing interest until I pay it off?
Yep, it comes straight out of your account, just the same as if you’d used it as a debit card. The only difference is that, instead of punching in your PIN, you sign the receipt.
This is the same situation at any merchant that is not set up with a PIN pad device for you to enter your number. The transaction is processed as a credit instead of a debit and you sign the slip. When it gets to your bank, it is treated just like any other debit card transaction.
A Word of Warning: your “Location” in the SD user profile is blank, so I will just add that the term “debit card” means differerent things in different countries. If you are in the USA, then the responses you received from the US-based Dopers are applicable, and you’re probably OK. But if you’re not, the situation may be different. If in doubt, check with a branch of your bank.
Also, even in the U.S., it sometimes differs. I once had a bank account that debited the cash reserve account when I used my card as a credit card. The cash reserve account is attached to the checking account but it serves as a dual overdraft protection/credit account. I had to make payments to that account to pay off the balance just like you would a regular credit card account.
My current account functions as described above however.
My bank charges a transaction fee whenever I use the card as a debit card; they don’t charge a fee when I use the card as a credit card.
Of course, this means that I make sure I never ever key in a PIN.
I was told that the money travels over two entirely different networks, with entirely different business models, hence the bank fee on one and no bank fee on the other.
Well, also, banks get to charge more money if the card is used as a credit card, that’s why they put a fee on the PIN usage so you’re more likely to use it as a credit card. On the other hand, merchants prefer PIN usage (because cheaper for them) so they’re starting to roll out incentives for using a PIN nowadays.